Japan: Business confidence improves in Q3, remains deeply pessimistic
Business sentiment among large manufacturers—according to the Bank of Japan’s closely watched Tankan survey—came in at negative 27 in Q3, up from the negative 34 reading clocked in Q2 but below market expectations of minus 23. Furthermore, the sentiment value remained below the 0-threshold separating pessimism from optimism regarding current business conditions. The value is calculated by subtracting the number of respondents that say economic conditions are improving from the number of respondents that say they are deteriorating.
Confidence among large non-manufacturing firms rose to minus 12 in Q3 from minus 17 in Q2.
Regarding the outlook, sentiment among large manufacturers regarding business conditions in Q4 was minus 17, up from the current reading of minus 27 but still firmly in pessimistic territory. Sentiment among large non-manufacturing firms was minus 11, up marginally from the current reading of minus 12, but again remaining pessimistic. As such, businesses expect operating conditions to remain challenging in the coming months, albeit slightly less so.