Japan Business Confidence

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Japan: Business sentiment improves in Q2; prospects jump to nearly eight-year high

July 1, 2015

According to the Bank of Japan’s quarterly TANKAN business survey, sentiment among large manufacturers improved in Q2, rising from Q1’s 12 to 15. The print came in above the reading of 12 that markets had expected and represented the highest reading since Q1 2014. As a result, the index remains firmly entrenched above the 0-threshold, which means that optimists outnumber pessimists. Businesses are becoming more optimistic due to rising consumer confidence and still-low commodity prices.

Confidence in non-manufacturing industries improved further in Q2, increasing from 16 in Q1 to 19, which marked the highest reading in five quarters.

Large enterprises in the manufacturing sector expect that conditions will improve sharply in the next three months. The forward-looking forecast index rose from 10 in Q1 to 16 in Q2, which represented a nearly eight-year high. Meanwhile, large manufacturers forecast that the Japanese yen will average 115.7 JPY per USD in the second half of the fiscal year 2015 (ending March 2016).


Author: Ricard Torné, Lead Economist

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Japan Business Confidence Chart


Japan Business Confidence Q2 2015

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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