Japan Business Confidence Q4 2017


Japan: Healthy global demand boasts business sentiment in Q4

December 15, 2017

According to the Bank of Japan’s quarterly Tankan business survey, sentiment among large manufacturers jumped to the highest level since 2006, suggesting that the economy is gathering momentum. The index rose from 22 in Q3 to 25 in Q4, exceeding the reading of 24 projected by a median market forecast. The Tankan's business survey is calculated by subtracting the number of respondents who say economic conditions are improving from those who say they are deteriorating. A positive reading means optimists outnumber pessimists.

Confidence in non-manufacturing industries steadied at Q3’s 23 in Q4, matching forecasts.

Higher demand for Japanese goods and soaring corporate profits is supporting manufacturers’ sentiment. Although the forward-looking indicator for the next three months was unchanged at 19, it still represented the highest level since 2007.

Meanwhile, large manufacturers forecast that the Japanese yen will average 109.7 JPY per USD in the second half of the fiscal year 2017 (ending March 2018).

Author: Ricard Torné, Lead Economist

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Japan Business Confidence Chart

Japan Business Confidence Q4 2017

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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