Japan's business confidence among people with jobs sensitive to domestic economic trends improved in December for the first time in two months, due partly to strong sales of winter clothes and production being switched to Japan after massive flooding hit factories in Thailand, the government said on Thursday.

The diffusion index of confidence among so-called economy watchers, including shop clerks, hotel managers and taxi drivers, stood at 47.0, up 2.0 points from November, the Cabinet Office said. A reading below 50 indicates pessimists outnumber optimists.