Small business confidence in Japan has begun 2016 on a downbeat note.

The monthly Shoko Chukin Bank survey, which questions 1,000 companies, reported a reading of 47.2 in January, the lowest since last June. The reading was 48.3 in November.

The 50 mark indicates optimists outnumber the pessimists; the last time the series reported this was in March 2014, before the country’s first sales tax rise in almost two decades was put in place. The jump from 5 to 8 per cent was modest by international standards, but was regarded as big in Japan, given that the last such rise was in 1997.

Small businesses are also grappling with sluggish demand as wages fail to increase meaningfully.

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