BOJ Survey Shows Japanese Business Confidence Improves Despite High Inflation Expectations

Japanese business confidence improved in the three months to September, according to the central bank's quarterly survey. The 'tankan' survey showed that big manufacturers' sentiment increased to +24 from +22 in June, while non-manufacturers' sentiment stood at +35 after a reading of +37 in June.

The improvement comes as the Japanese economy is expected to weather the impact of the Middle East conflict. However, companies still expect inflation to hit 2.6% three years from now and 2.5% five years from now, well above the Bank of Japan's 2% target.

The central bank raised interest rates to a 31-year high last month, signaling its focus on preventing inflation from overshooting its target. The survey will be among the factors affecting the BOJ's quarterly growth and inflation forecasts due later this month.