Key facts
- Japanese manufacturers' business confidence reached its highest point since December 2021 in September.
- The Reuters Tankan sentiment index for manufacturers increased to plus-21 in September, up from plus-18 in August.
- Strong demand for semiconductors and data-center-related products significantly boosted the electronics sector's sub-index.
- Non-manufacturers' sentiment saw a slight increase to plus-29 from plus-28.
- Manufacturers anticipate further sentiment improvement to plus-27 in the next three months.
Business confidence among major Japanese manufacturers reached its highest level since December 2021 in September, according to a Reuters poll. The Reuters Tankan sentiment index for manufacturers rose to plus-21 from plus-18 in August, driven primarily by robust demand for semiconductors and data-center-related products. The electronics sector, in particular, saw its sub-index surge to plus-39 from plus-24.
Sentiment among non-manufacturers also saw a slight increase, with the index edging up to plus-29 from plus-28. The poll, which serves as a leading indicator for the Bank of Japan's quarterly Tankan survey, received responses from 224 out of 510 firms surveyed between August 26 and September 4.
Looking ahead, manufacturers anticipate further sentiment strengthening to plus-27 in the next three months, with non-manufacturers expecting their index to hold steady at plus-27. Key downside risks identified by respondents include ongoing Middle East tensions, rising raw-material costs, and a potential slowdown in domestic consumption.