Japan Business Confidence

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Japan: Business sentiment stabilizes in Q4; prospects paint a tougher road ahead

December 14, 2015

According to the Bank of Japan’s quarterly TANKAN business survey, sentiment among large manufacturers stabilized in Q4, with the index remaining at Q3’s 12. The index, which came in above the reading of 11 that markets had expected, remains firmly entrenched above the 0-threshold, which means that optimists outnumber pessimists. November’s steady figure suggests that manufacturers coped relatively well poor domestic conditions and slowing activity in China.

Confidence in non-manufacturing industries declined slightly in Q4, falling from 19 in Q3 to 18 and marking a three-month low.

Despite stable current conditions, large enterprises in the manufacturing sector are becoming more pessimistic about the country’s economic outlook in the next three months. The forward-looking forecast index fell from Q3’s 10 to 7 in Q4, which represented the lowest level since Q1 2013. Meanwhile, large manufacturers forecast that the Japanese yen will average 118.0 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 Q4 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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