In the September Tankan survey released by the Bank of Japan, the business conditions DI for all company sizes and industries rose 3 points from the previous survey to +21, with improvement particularly pronounced in manufacturing. The improvement among small and medium-sized companies exceeded that among large companies.
The nationwide business conditions DI stood at +21, with improvement particularly pronounced in manufacturing. The all-company-size DI rose to +19, while price pass-through and energy market trends lifted business sentiment.
The DI for large manufacturers rose 2 points to +24, marking improvement for 6 consecutive quarters and reaching its highest level since the March 2018 survey. The DI for small and medium-sized companies rose 5 points to +14, with the improvement exceeding that among large companies. Strength in AI- and semiconductor-related demand and progress in earnings improvement were cited as factors.
Although nonmanufacturing remained at a high level, some market participants took a cautious view of its future direction. Easing difficulties in procuring raw materials and a lull in energy market conditions supported business sentiment.