Business Sentiment Continues to Slide Among Japanese Companies: BOJ Tankan Survey

Arslan Butt•Tuesday, October 1, 2019•1 min read

According to the Bank of Japan’s Tankan survey, business confidence among big manufacturers in Japan declined to the lowest levels in six years during Q3 2019. The big manufacturers’ sentiment index fell to +5 in September from +7 in June, but has come in better than economists’ forecast which was for a reading of +2 for this period.

The index reveals the heavy toll exacted by the ongoing US-China trade war on Japan’s export-reliant economy as this is the third consecutive month of decline posted for this reading. Meanwhile, the sentiment among big non-manufacturers also worsened with the index slipping to +21 vs. +23 in June, but coming in better than economists’ expectation for +20.

The survey also paints a bleak picture for the next quarter as respondents expect the business confidence to decline even further in the coming quarter. On the positive side, big companies are planning to increase their capital expenditure by 6.6% till March 2020, beating economists’ expectations which were for a 5.5% growth in capex.

On the release of this news, the Japanese yen fell steeply but has recovered since then, with USD/JPY trading at around 108.21 at the time of writing.

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Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.