Japan big manufacturers' mood worsens on China woes, capex plans firm-tankan

* Big manufacturers' mood worsens 3 points to +12 * Big non-manufacturers' mood up 2 points to +25 * Big firms plan 10.9 pct rise in FY 2015/16 capex * Most firms see conditions worsen ahead - tankan (Adds analyst quotes, detail) By Leika Kihara and Tetsushi Kajimoto TOKYO, Oct 1 (Reuters) - The confidence of Japan's big manufacturers worsened in the three months to September, the central bank's tankan survey found on Thursday, raising doubts the government's "Abenomics" policies of fiscal and monetary stimulus can do much more to improve Japan Inc's cautious economic outlook.

The service-sector's mood, however, improved to more than a two-decade high and big firms maintained their bullish capital expenditure plans, offering some relief to policymakers worried at growing signs that Japan may slide into another recession.

While the mixed reading alone may not nudge the Bank of Japan into expanding stimulus immediately, it will keep the BOJ under pressure to offer monetary support to keep overseas headwinds from curtailing corporate spending plans too severely, analysts say.

The headline index for big manufacturers' sentiment fell by 3 points to plus 12, marking the first deterioration in three quarters and roughly matching a median market forecast, the BOJ's quarterly business sentiment survey showed on Thursday "The tankan showed Japanese corporate sentiment held firm despite a recent run of weak data. Our main scenario is for the BOJ to wait until next April before easing policy further," said Yuichiro Nagai, an economist at Barclays Capital Japan.

"That said, we cannot rule out the chance of additional easing this month, if another weak indicator heightens the chance of a recession." Machinery makers were particularly hit hard by slumping demand for construction equipment and industrial robots in China, the tankan survey showed.

By contrast, big non-manufacturers' sentiment improved 2 points to plus 25, its highest level since 1991, as retailers enjoyed falling energy costs and a surge in shoppers from China at department stores across Japan.

Both big manufacturers and non-manufacturers expect conditions to worsen three months ahead, reflecting looming uncertainty over whether demand in emerging markets will pick up.

Still, big firms expect to increase capital spending by 10.9 percent in the fiscal year ending in March 2016, up from their plans three months ago and exceeding market forecasts.

The tankan will be among key indicators for central bank policymakers to scrutinise when they meet for two rate reviews this month - one next week, and another on Oct. 30 when the BOJ publishes fresh long-term economic and price forecasts.