By Tetsushi Kajimoto and Izumi Nakagawa

TOKYO (Reuters) - Japanese manufacturers' confidence rose for a fourth straight month to a 16-month high in December and the service sector's mood also rose, a Reuters poll showed, with a weaker yen brightening prospects for exporters.

The monthly Reuters Tankan - which tracks the Bank of Japan's key quarterly tankan - found sentiment at manufacturers and service-sector firms both up from three months ago, pointing to improvement in the central bank's survey out next week.

In the poll of 531 large- and mid-sized firms, carried out between Nov. 22 and Dec. 2 and in which 268 responded, the sentiment index for manufacturers rose to 16 from 14 in November, driven by steel and transport equipment makers.


It was the highest reading since August 2015, but it is expected to fall to 10 over the next three months.

Compared with three months ago, the index was up 11 points, indicating an improvement in the headline big manufacturers' index in the BOJ tankan due Dec. 14.

In written comments, Japanese exporters expressed concerns about uncertainty over the global outlook following the shock U.S. election victory by Donald Trump, while a subsequent dollar rebound buoyed sentiment among manufacturers.

"It's good that the yen has weakened. But the outlook is highly unclear," a manager at a chemicals firm wrote in the survey, which companies answer anonymously. "There's a mountain of problems such as Trump, South Korea, China and Russia."

The service-sector index rose to 19 from 15 in November, up five points compared with three months ago, a good sign for the upcoming BOJ tankan. It was the highest reading since May, and it is seen edging up further to 20 in March.

In a worrying sign for private consumption that constitutes about 60 percent of the economy, however, retailers' sentiment fell to minus 14 from zero in November, reflecting weak domestic demand.

"Sales from inbound tourism are slowing and clothing sales remain poor," one retailer said. Another retailer said business conditions were not so good due to "high input prices caused by a weak yen, and a spike in unit costs of foodstuffs."

The BOJ's last tankan on Oct. 3 showed big Japanese manufacturers' mood held steady in the third quarter while service-sector sentiment fell to its lowest in nearly two years.

The central bank last month held off on expanding stimulus, underscoring a market view that it will stand pat unless a severe shock threatens to derail economic recovery. It holds the next rate review Dec. 19-20.

(Reporting by Tetsushi Kajimoto and Izumi Nakagawa; Editing by Eric Meijer)

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