Japan Business Confidence Q3 2021


Japan: Business sentiment hits highest level in nearly three years in Q3

October 1, 2021

Business sentiment among large manufacturers—according to the Bank of Japan’s closely watched Tankan survey—came in at plus 18 in Q3, up from the plus 14 reading clocked in Q2 and marginally above market expectations of a plus 13 reading. 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. As such, the sentiment value rose further above the zero-threshold separating pessimism from optimism regarding current business conditions and, in the process, clocked the highest figure since Q4 2018.

Furthermore, confidence among large non-manufacturing firms rose to plus 2 in Q3 from plus 1 in Q2.

Regarding the outlook, sentiment among large manufacturers regarding business conditions in Q4 was plus 14, down slightly from the current reading of plus 18 but nevertheless remaining in optimistic territory. Sentiment among large non-manufacturing firms was plus 3, rising from the current reading and thus moving further into optimistic territory. As such, businesses remained relatively positive regarding operating conditions in the coming months.

FocusEconomics panelists forecast fixed investment to grow 0.8% in 2021, which is down 0.2 percentage points from last month’s forecast, and 2.6% in 2022.

Author:, Economist

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Japan Business Confidence Chart

Japan Business Confidence Q3  2021

Note: Quarterly index of business sentiment. Values above 0 for manufacturers (actual result) indicate a positive assessment of the current business conditions. Values above 0 for manufacturers (forecast) indicate a positive assessment for the next quarter’s business prospects.
Source: Bank of Japan (BoJ).

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