Japan Business Sentiment Improves Despite Oil Shock and Weak Yen

The Bank of Japan's quarterly tankan survey showed an improvement in business sentiment for the sixth straight quarter, despite various challenges facing the economy. Sentiment among large manufacturers rose to 24 from 22, while non-manufacturers slipped to 35 from 37.

These numbers come as Japan deals with a weak yen and rising import costs due to higher oil prices. The war in Iran has disrupted oil imports, causing Brent crude to trade at about $98 a barrel, down from nearly $120 earlier but still above pre-war levels of below $70 a barrel.

The Bank of Japan has raised its benchmark interest rate twice this year to 1.25%, its highest level in three decades, as it tries to normalize monetary policy after years of near-zero or negative rates. However, the weak yen remains a key challenge for the economy, with the US dollar trading at nearly 160 yen compared to around 110 yen five years ago.