Key facts
- Big Japanese manufacturers' business sentiment index reached +22 in June, the highest since March 2018.
- The index for big non-manufacturers' mood rose to +37, the highest since August 1991.
- The Bank of Japan raised interest rates to a 31-year high in June.
- The BOJ is focused on taming price pressures from energy shocks.
Big Japanese manufacturers' business sentiment improved in the three months to June, reaching its highest level since March 2018, according to a Bank of Japan survey. The headline index stood at +22, up from +17 in March and exceeding market forecasts. The mood among big non-manufacturers also improved, with their index at +37, up from +36 and marking the highest level since August 1991. These positive economic indicators come as the Bank of Japan considers further policy normalization. The central bank raised interest rates to a 31-year high in June and has signaled readiness to continue tightening to combat inflation driven by energy shocks, including those stemming from the Middle East conflict. The survey results will be a key factor in the BOJ's upcoming policy meeting on July 30-31.