DEBT FINANCING. Improves the State of mind of Japan major manufacturers, outlook darkens

Tokyo (Reuters)-major Japanese manufacturers turned positive in the third quarter as output recovered quickly after the March 11 earthquake and tsunami, but scaled back forecasts for the months ahead, due to the strength of the yen and an impending global slowdown, a survey of the Finance Ministry showed.
The research comes before the vote of the Bank of Japan's tankan quarterly due on October 3, a key central bank in the conduct of monetary policy.
"Three months ago, companies were overly pessimistic but this pessimism has decreased thanks to a quick recovery in supply chains disrupted by the earthquake of March," said Junko Nishioka, Chief Economist of RBS Securities in Tokyo.
"But the downward revision in large manufacturers forecast for October-December and a further slowdown expected for the next quarter are clear evidence of blow of the yen have appreciated beyond their assumptions.
Nishioka "This suggests that the companies will be similarly cautious about the prospects of Japan's tankan survey from the Bank of Japan due next month, keep up the pressure on the BOJ to keep an easy policy," he said.
The sentiment index for large manufacturers improving more 10.3 in July-September less 23.3 in April-June, the joint research of the Ministry of finance and of economic and Social Research Institute showed on Monday.
Companies also rose its capital spending forecasts for the fiscal year to March 2012 an increase of 5.4 per cent, an increase of 4.9% seen in the previous quarterly survey.
In another sign of improving conditions for business Japanese wholesale prices that reflect the input costs increased by 2.6% in the year to August, below the median forecast for a 2.7% rise and down from July.
However, predictions for the sentiment index investigation of common Finance Ministry in the fourth quarter were scaled back beyond 13.6 of 17.4 in the last survey.
The March earthquake and the tsunami that wiped out entire communities along the coast of Northeast Japan and 20,000 dead, hit the third largest economy in its second recession in three years.
Economists expect the economy to continue growing in this 03:15 of consecutive quarters of contraction, but outlook is still ahead seems increasingly blurred due to the strong yen and faltering global economic growth.
The BOJ eased monetary policy in its review of the rate in August 4 because advisers wanted to show the determination of the seat to head off various risks that lay ahead for the economy, showed the minutes of the meeting.
The central bank held off on further policy loosening at a subsequent meeting in September, saving his little ammunition for later with the yen stabilising after spiking to a record level against the dollar on August 19.
A group of seven meeting over the weekend offered little in terms of coordinated action that could help sustain economic growth while much of the developed world grapples with excessive debt accumulated during the financial crisis of 2008-2009.
Index of business sentiment of Japan measures the percentage of companies that expect the business environment to improve from the previous quarter decreased the percentage who expected it to worsen.

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