The September BOJ Tankan survey was released, showing improved business sentiment, particularly among large manufacturers. Pricing behavior remained firm, and the survey indicated that further price pass-through is likely to progress.
The September BOJ Tankan survey was released, showing that the business conditions DI for large manufacturers rose to +24, up 2 points from the previous survey. By contrast, the DI for large nonmanufacturers fell 2 points from the previous survey to +35. Demand for semiconductor-related products, including production machinery and electrical machinery, remained firm, while nonferrous metals and chemicals also showed steady performance.
The gap between the price outlook and the selling-price outlook continued, with the price outlook at +2.6% and the selling-price outlook at +3.5%, indicating that expected selling-price increases continued to exceed the expected rate of price inflation. The analysis suggested that this could support companies' efforts to pass higher costs on to customers.
Many responses to the BOJ Tankan survey are based on companies' own earnings plans. Against the backdrop of the Tankan and analyst forecasts being aligned, the survey suggested room for future revisions to earnings outlooks. In the corporate finance section, the DI for the perceived level of borrowing rates was +68, the DI for lending attitudes was +13, and the DI for financial position was +11. Based on these trends, the impact of the rate-hike cycle was viewed as limited.