Report reveals gloom among Japanese manufacturers

Japanese manufacturers are increasingly gloomy about their prospects as exports take a hit from antagonism with China over a territorial dispute, a quarterly survey by Japan’s central bank showed.

The Bank of Japan’s “tankan” index for the December quarter slumped to minus 12 from minus 3 in the previous quarter, a result that was much worse than expected. A reading below zero means pessimistic views outnumber optimists.

While the survey is a measure of sentiment, not data, it ups the likelihood of further easing by the central bank at its policy meeting next week.

The ruling Democratic Party of Japan is widely expected to suffer a harsh rebuke from voters in a parliamentary election on Sunday.