Japan's Q1 business sentiment sinks as rising costs hurt - survey

FILE PHOTO: People cross a street in a business district in central Tokyo, Japan, December 8, 2015.REUTERS/Thomas Peter

TOKYO (Reuters) - Japan's business sentiment sank in the first quarter as rising raw material costs and curbs to combat the COVID-19 pandemic hit the food and service sectors, a government survey showed on Friday, highlighting the fragile state of the economic recovery.

The result adds pressure to policymakers to ramp up fiscal support to support Japan's economy, which is likely to have stalled in the current quarter and faces fresh risks from soaring commodity prices blamed on the Ukraine crisis.

An index gauging big companies' sentiment stood at -7.5% in the current quarter, compared with a reading of +9.6 in the October-December period, the survey showed. It was the first negative reading in three quarters.

Small- and medium-sized companies' moods also soured in the first quarter, the data showed.

Among big firms, sentiment worsened for sectors like food, chemical, services and transportation, the data showed.

(Reporting by Leika Kihara; Editing by Sam Holmes)

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