Bank of Japan Q4 Tankan large manufacturers +12 vs +11 expected
Highlights of the fourth quarter Japanese Tankan:
- Prior large manufacturing index was +12
- Large manufacturing outlook +7 vs +11 exp
- Prior large manufacturing outook +10
- Large non-manufacturing index +25 vs +23 exp
- Prior large non-manufacturing index was +25
- Large manufacturing outlook +18 vs +22 exp (prior +19)
- Employment -19 vs -16 prior
The current reading were both better than expected but the outlooks were significant disappointments. The small manufacturer outlook also fell to -4 from -2 in a surprise signal about widespread pessimism from businesses.
There is more good news in capex despite the sour mood. Large manufacturers expect to increase capex 15.5% compared to 10.9% y/y in September. Large non-manufacturers expect to boost expect to boost spending 8.5%.
On prices, there is no good news for inflation.
On net, I'd expect this makes it slightly more likely we get BOJ easing in Q1 2016.