Bank of Japan Tankan for Q2

In brief:

  • Big manufacturing sentiment improved for the 3rd consecutive quarter and is now at its highest since March of 2014
  • Big non-manufacturing sentiment up for its second successive quarter, to its highest since December of 2015
  • Small manufacturing sentiment improvement now stretching to 4 quarters straight, highest since March of 2007
  • Big manufacturers see the USD averaging 108.31 yen for FY 17/18 (compared to the March Tankan survey projection at 108.43)

The numbers:

Tankan Large Manufacturing Index 17

  • expected 15, prior was 12

Tankan Large Non-Manufacturing Index 23

  • expected 23, prior was 20

Tankan Large Manufacturing Outlook 15

  • expected 14, prior was 11

Tankan Large Non-Manufacturing Outlook 18

  • expected 21, prior was 16

Tankan Small Manufacturing Index 7

  • expected 7, prior was 5

Tankan Small Non-Manufacturing Index 7

  • expected 6, prior was 4

Tankan Small Manufacturing Outlook 6

  • expected 4, prior was 0

Tankan Small Non-Manufacturing Outlook 2

  • expected 3, prior was -1

Tankan Large All Industry Capex 8.0%

  • expected 7.2%, prior was 0.6%


Some mixed results but on balance more evidence of improvement in the Japanese economy. There is a tug of war going on with implications of an improving economy combined with a still woeful miss on the BOJ inflation target. Better data for the economy implies a reduced need for Bank of Japan monetary policy accommodation, but the missing inflation target implies the exact opposite.