TOKYO (REUTERS) – Japanese business sentiment improved for the second straight quarter in October-December, a key central bank survey showed on Monday (Dec 14), a welcome sign for the economy as it continued to emerge from the initial hit of the coronavirus pandemic.

But companies slashed their capital expenditure plans for the year ending in March, as a recent resurgence of infections reinforce expectations any recovery in the world’s third-largest economy will be fragile.

The headline index for big manufacturers’ sentiment improved to minus 10 in December from minus 27 in September, the Bank of Japan’s closely watched “tankan” survey showed. It compared with a median market forecast for a reading of minus 15.