Over the weekend we had the, improving, official PMIs from China:
Today, Monday, we'll get the second China manufacturing PMI, this one from Caixin / S&P Global.
We'll also get the Bank of Japan Tankan report for Q1. The Reuters Tankan, out monthly, serves as a guide. These for January, February and March are here:
- Reuters Tankan - Manufacturing index +6 in January from +12 in December
- Reuters Tankan report for February shows a drop for services, slump for manufacturing
- Japan Reuters Tankan for March shows solid improvement for Manufacturing and Services
A preview of the Tankan has been posted here:
- The BoJ Tankan business survey is expected to show a decline in Large Manufacturers’ sentiment to +10 from +12, according to a Reuters poll, whilst the Large Non-Manufacturers Index is seen rising to +33 from +30 last quarter. Capex is expected to print at 9.2% vs 13.5% in Q4 2023. Desks suggest large manufacturers’ sentiment will likely be hampered by auto production disruptions in the quarter, with some also citing the vehicle certification issues which resulted in the suspension of shipments of some models. The survey also comes as the BoJ ended 17 years of negative interest rate policy in March, although cautiousness is expected from the Bank, whilst the annual wage negotiations saw the largest pay rise in 33 years. Using the Reuters Tankan survey as a proxy for the BoJ’s release, March manufacturers' sentiment index printed at +10 vs -1 from Feb while the Service-sector index came in at +32 vs +26 from Feb. The Reuters release surveyed 240 manufacturers and 258 non-manufacturers, with some 237 firms responding during the March 6-15 period.
More on the Tankan below.
The term "Tankan" is short for "Tanshin Kansoku," which roughly translates to "Short-term Economic Observation".
- its published quarterly by the BOJ and is a closely watched economic indicator
- the BoJ surveys thousands of Japanese firms of all sizes, across a wide range of industries
- questions are focused on firms' current business conditions and their expectations for the coming quarter and year
- covering aspects such as production, sales, profits, investment in plant and equipment, employment, prices, and more
The headline(s) to to the report are diffusion indexes, which reflects the difference between the percentage of firms that are optimistic about business conditions and those that are pessimistic.
- a positive reading suggests that more companies are optimistic, while a negative reading indicates more pessimism
The report is segmented into "large manufacturers," "large non-manufacturers," "small manufacturers," and "small non-manufacturers" so as to help provide insight into different sectors of the economy.
