Ahead of the release of the BOJ Tankan September survey, views have emerged that the large manufacturers' business conditions DI may improve from the previous reading of +22, raising expectations for an improvement in stock market sentiment.
In the September BOJ Tankan survey, the large manufacturers' business conditions DI is expected to improve further from the previous reading of +22, while the outlook indicates that the large non-manufacturers' DI will remain at the previous level.
The Reuters Tankan, regarded as a useful leading indicator for the BOJ Tankan, improved in September, with the manufacturing DI expected to reach +21 and the non-manufacturing DI around +29. These figures are expected to potentially exceed the average levels for the April-June quarter.
In addition, the projected level for the Nikkei average is approximately ¥72,000 over the next 12 months, while USD/JPY is indicated to remain around ¥155. The view is that the BOJ will set its policy rate at 1.25% in September and raise it to 2.25% by the end of 2027.