By Tetsushi Kajimoto and Stanley White
TOKYO (Reuters) - Confidence at Japanese manufacturers inched up in August to mark the first improvement since April, but the service sector's mood soured for the second straight month, a Reuters poll showed, reflecting a tame economic recovery from April's sales tax rise.
A separate survey showed manufacturing activity accelerated in August as export and domestic demand increased in another sign that the economy is steadying after the sales tax hike.
While the service-sector mood is seen rebounding over the coming three months - suggesting the pain of the tax hike is easing - manufacturers' sentiment is expected to slide, possibly reflecting lingering concerns that external demand and factory output will not improve further.
The Reuters Tankan poll of 400 big firms taken August 4-18, of which 281 replied, followed data last week that showed the economy had suffered its worst slump in April-June since the March 2011 disaster. Although policymakers and private-sector economists expect a rebound in the current quarter, the poll indicated that any recovery is likely to be modest.
The monthly poll is strongly correlated with the Bank of Japan's tankan survey. Weak readings in the quarterly tankan due next on Oct. 1 and other indicators could keep the pressure on central bank to act to sustain growth in the world's third largest economy.
"Recovery in demand is being delayed as China and other emerging markets lack momentum despite steadiness in the U.S. economy as seen by recent indicators," a producer of nonferrous metals said in the Reuters poll.
Sentiment at materials businesses such as chemicals and textile/paper took a hit, with companies raising concerns about geopolitical risks and rising raw materials costs that squeeze their profits.
Non-manufacturers in areas such as real estate/construction and retail/wholesale were still feeling the impact of the sales tax hike and led the slump.
A real estate firm said housing demand slumped sharply after the sales tax hike, and many industry participants believed it would be hard to recover at least until the next tax rise planned in October 2015, that could encourage last-minute spending to avoid the higher tax rate.
In the Reuters Tankan, the sentiment index at manufacturers stood at plus 20, up 1 point from July. The service-sector gauge was at plus 19 in August, down 4 points from the prior month and marking a second straight month of declines.
Indexes are calculated by subtracting the percentage of pessimistic responses from optimistic ones.
The index for manufacturers is expected to worsen to plus 17 in November, and the non-manufacturers' index is seen rising to plus 24, meaning that optimists outnumber pessimists.
The last BOJ tankan showed on July 1 that big manufacturers' mood worsened in the three months to June but was seen improving in the current quarter.
The Markit/JMMA flash Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 52.4 in August, up from a final reading of 50.5 in July as activity output accelerated.
The index remained above the 50 threshold that separates expansion from contraction for the third straight month and showed the fastest expansion since March.
A increase in new orders for goods and new export orders drove gains in manufacturing in August, the survey showed on Thursday.
Economists expect annualised growth of about 4 percent for the three months to September after the sales tax hike to 8 percent from 5 percent in April pushed the economy into a 6.8 percent drop in the second quarter.
Some expect the BOJ will have to cut its growth estimate in a half-yearly assessment due on Oct. 31, potentially nudging it into expanding its enormous purchases of government bonds and other assets.
(Editing by Eric Meijer)