Confidence among Japan's biggest manufacturers has slipped for the fourth quarter in a row, a key survey showed today, reflecting lingering worries over the US-China trade war.

The Bank of Japan's December Tankan business survey - a quarterly poll of 10,000 companies - showed a reading of zero among major manufacturers, a worse-than-expected fall from +5 in the previous quarter. 

The market consensus was for a +3 reading. 

The Tankan survey reports the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable. It is considered to be the broadest indicator of how Japan Inc. is faring. 

Economists have warned that worries over US-China trade frictions are forcing manufacturers to refrain from active investment. 

The latest reports, however, suggested the US and China had struck a bargain on trade, which would cancel a fresh round of tariffs on $160 billion in Chinese imports due to kick in on Sunday. 

A long-planned sales tax hike in Japan to 10% from 8% could also have weighed on growth, they said. 

A temporary halt in factory operations due to deadly Typhoon Hagibis in October could also be a reason for a dip in confidence, said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities, ahead of the survey. 

The index for non-manufacturers fell to 20 from 21 in the previous quarter. 

Japan's economy, the world's third-biggest, grew by 0.4% in the third quarter, the third period of expansion in a row.