TOKYO (Reuters) - Japan's small hotels and restaurants continue to suffer from financing strains caused by the COVID-19 crisis, a survey showed on Tuesday, complicating the central bank's decision on when to end pandemic-relief funding programmes.
An index gauging funding conditions among small and midsized hotels and restaurants hit minus 33 in the three months to December, according to a full version of the Bank of Japan's tankan survey.
While the reading was better than minus 46 in the previous survey, it showed that far more firms saw financing conditions as severe compared with those that felt they were easy.
The plight of small, service-sector firms highlights the widening gap among companies that weathered the pandemic's hit, and those still reeling from the fallout.
An index measuring funding conditions of companies of all size and industry improved in the three months to December, an outline of the tankan released on Monday showed.
The results are among factors the BOJ will scrutinise at this week's meeting in deciding whether to scale back emergency funding deployed last year to combat a pandemic-induced cash crunch, which expires in March 2022.
The board is leaning toward tapering the BOJ's corporate bond and commercial paper purchases, but leaving intact a portion of a loan scheme targeting smaller firms, sources have told Reuters.
"The BOJ may end corporate bond and commercial paper purchases. Given uncertainty over the Omicron variant, however, the central bank may play it safe and extend other parts of the programmes beyond March," said Takashi Miwa, chief economist at Nomura Securities.