Big manufacturers39; sentiment index 11 vs 13 in March
Servicesector sentiment index 34 vs 32 in March
Big firms expect to increase capex by 4.0 in fiscal 2024

TOKYO, April 1 Reuters Optimism in Japan39;s services sector climbed to a 33year high in the first quarter on booming tourism and rising profits from price hikes, a central bank survey showed, keeping alive market expectations of another interest rate increase before yearend.

That rosy mood was somewhat offset by sentiment for big manufacturers souring for the first time in four quarters due in part to auto output disruptions, underscoring Japan39;s fragile economic recovery.

The survey outcome is among factors the Bank of Japan BOJ will scrutinise in its next meeting on April 2526, when it issues fresh quarterly growth and inflation forecasts.

The April projections will draw market attention for any clues on how soon the BOJ could raise interest rates again, after having exited its massive stimulus programme last month.

Business sentiment was good overall and capital expenditure plans are fairly strong. The tankan probably leaves the BOJ with hope Japan will continue to see trend inflation accelerate, said Tsuyoshi Ueno, an economist at NLI Research Institute.

The results open scope for additional BOJ rate hikes.

The headline sentiment index for big manufacturers slid to 11 in March from 13 in December, the tankan showed on Monday, as output disruptions at some Toyota Motor group plants hurt confidence…