Big manufacturers39; sentiment steady, matches forecast
Big servicesector mood improves slightly, outlook darkens
Big firms expect to increase capex by 10.6 this fiscal year
Data among factors closely watched by BOJ in setting rates

TOKYO, Oct 1 Reuters Japanese business sentiment was steady in the three months to September, a closely watched survey showed, a sign the economy remained on track for a moderate recovery that leaves scope for further interest rates hikes by the central bank.

But companies remained cautious about the outlook with servicesector firms projecting business conditions to sour over the next three months, the Bank of Japan39;s tankan survey showed on Tuesday, as weak global growth and volatile financial markets cloud the outlook.

The tankan will be among key factors the BOJ will scrutinise in setting monetary policy and releasing fresh growth and inflation forecasts at its next meeting on Oct. 3031.

The headline index measuring big manufacturers39; business confidence was 13 in September, unchanged from June and matching median market forecasts, the survey showed.

The sentiment index for big nonmanufacturers rose slightly to 34 from 33 in June, exceeding market forecasts of 32, as price hikes lifted retailers39; profits, the tankan showed.

Despite the yen39;s rebound since midJuly, big manufacturers39; business sentiment remains unexpectedly solid, said Takeshi Minami, chief economist at Norinchukin Research Institute. Overall results are…