Japanese Manufacturers Most Optimistic Since 2018: Tankan Survey

Japan's biggest manufacturers have shown their most optimism since 2018, according to a recent survey by the Bank of Japan. The sentiment index climbed to 24 in September from 22, marking an improvement for a sixth straight quarter. Economists had forecast a rise in the gauge to 25.

The Tankan business survey is one of the bank's most closely watched data sets, and the latest results suggest continued resilience among Japanese companies. Robust global AI demand is cushioning the fallout from the Middle East conflict, while rising real wages are supporting demand for non-manufacturing services.

The Bank of Japan will take these results into consideration as it decides whether to raise interest rates again by December. The survey also showed that corporate price expectations remain elevated but edged down slightly, with firms projecting an annual pace of inflation at 2.5% five years ahead.