Confidence of Japan's big manufacturers deteriorated sharply

Confidence among Japan's big manufacturers has deteriorated markedly as the global financial crisis takes a major hit to the real economy, according to the Bank of Japan's tankan survey for December. The Bank of Japan's quarterly business climate survey showed that its index of business sentiment for large manufacturers fell to -24 in December from -3 in September. Economists polled by Dow Jones Newswires expected, on average, that the index of sentiment for the big manufacturers would fall to -23 in December. Meanwhile, the Big Non-manufacturing Business Sentiment Index fell to -9 from +1 in the September survey. This was in line with economists' expectations. The results are likely to reinforce expectations that Japan's economy will plunge into a prolonged and deep recession as corporate earnings slump. Such a rapid decline in business confidence could prompt the Bank of Japan to cut interest rates again in the coming months to stop the economy from plummeting, some analysts said.