Japan manufacturers 'more upbeat'

Optimism among big Japanese manufacturers has grown in the past three months, a study said.

The results suggested large manufacturers had shaken off fears of the euro debt crisis and the strengthening yen, according to analysts.

However the outlook for the Japanese economy remains uncertain.

Last week Japan's new prime minister said the country was at "risk of collapse" under its huge debts.

Naoto Kan, in his first major speech since taking over, said Japan needed a financial restructuring to avert a Greece-style crisis.

Later this week, Japan's central bank is expected to announce a new loan scheme aimed at redirecting money to industries with growth potential.

The business survey index (BSI) of sentiment at large producers rose to 10 in the April-to-June period, from 4.3 in the previous quarter, a joint survey by the Ministry of Finance and the Cabinet Office's Economic and Social Research Institute showed.

The index measures the percentage of firms that expect the business environment to improve from the previous quarter, minus the percentage that expect it to worsen.

Firms also raised their capital expenditure plans, which observers said was a sign that corporations were showing greater appetite to spend.

"Sentiment is gradually improving both for underlying conditions and the outlook," said Takeshi Minami, chief economist for the Norinchukin Research Institute.

"The euro's decline triggered by the Greek debt crisis doesn't seem to have had much impact, at least for now."

Strong demand from Asia has meant that, so far at least, demand for Japanese exports has recovered despite weakness in other markets such as Europe and the US.