By Kaori Kaneko
TOKYO (Reuters) - Japanese big manufacturers' confidence likely hit a 6-1/2 year low in the September quarter, a Reuters poll found, as the U.S.-China trade war and weakening global demand hit the business mood.
The Bank of Japan's quarterly tankan business sentiment survey is projected to show the headline index for big manufacturers' confidence fell to +2 in September from +7 three months earlier, the poll of 12 economists found.
It would be the third straight quarterly deterioration and the lowest since March 2013 when the index showed -8.
That also means the index likely fell to the lowest since the BOJ under governor Haruhiko Kuroda started its super-loose monetary policy in April 2013.
The sentiment index for big non-manufacturers also likely worsened to +20 in September from +23 seen in June survey, the poll showed.
"The intensified U.S.-China trade friction, slowdown in overseas economies and yen's appreciation hit firms' business sentiment," said Tsuyoshi Ueno, senior economist at NLI Research Institute.
In the December quarter, big manufacturers' business confidence is expected to worsen to +1 and non-manufacturers' sentiment is also seen falling to +16, the poll found.
Big companies are projected to raise capital spending plans by 7.0% for this fiscal year to March 2020, slightly down from 7.4% projected in the June survey.
"A deterioration in the export environment and concerns over the economic outlook after a sales tax hike in October, big companies are expected to downgrade their caped plans," said Takeshi Minami, chief economist at Norinchukin Research Institute.
BOJ Governor Kuroda signaled on Thursday a readiness to ease monetary policy further, vowing to guide policy appropriately "without any preset conditions in mind".
The BOJ will publish its tankan survey at 8:50 a.m. on Oct. 1 (2350 GMT on Sept. 30).
Meanwhile, Japan's factory output in August likely slipped 0.5% from the previous month, due to weak exports to Asian nations, after a 1.3% gain in July, another poll of 16 economists showed.
The trade ministry will announce the factory output at 0850 JST on Monday (2350 GMT Sept. 29).
Retail sales data, also released at 0850 JST on Monday, was expected to show a 0.9% growth in August from a year earlier, after a 2% fall in July, the poll showed.
Sales of summer items, auto and home electric appliances likely contributed to the growth in retail sales, analysts said.
The poll also expects the jobless rate rose to 2.3% in August from 2.2% in July, and the jobs-to-applicants ratio stood at 1.58, down from 1.59.