In the September Tankan survey released by the Bank of Japan, the DI for large manufacturers rose 2 points from the previous survey to +24, while the outlook fell 3 points to +21. Meanwhile, conditions in accommodation and food services among nonmanufacturers deteriorated notably, with the view expressed that higher costs caused by the weaker yen and higher crude-oil prices were affecting the earnings environment for the restaurant industry.
In the September Short-Term Economic Survey of Enterprises in Japan (Tankan) released by the Bank of Japan, the business-conditions DI for large manufacturers rose 2 points from the previous survey to +24, marking the sixth consecutive quarter of improvement. Strong demand for AI and semiconductors contributed, while the outlook 3 months ahead fell 3 points to +21. Higher costs associated with rising crude-oil prices amid turmoil in the Middle East were a concern.
Across the DI, 9 of 16 industries improved, 5 deteriorated and 2 were unchanged. Some industries, including nonferrous metals and production machinery, recorded high levels above +40. The DI for large nonmanufacturers fell 2 points to +35, affected by higher raw-material and labor costs, and the outlook was expected to fall 5 points to +30.
In the BOJ Tankan, business conditions in accommodation and food services among nonmanufacturers deteriorated notably, falling 8 points for large companies and 6 points for small and medium-sized companies. Compared with manufacturing, the difficulty of passing higher costs on to consumers was identified as an issue.
Restaurants are seeking ways to remain profitable despite the challenging environment, and the focus is on how to absorb higher costs, in contrast to the resilience of corporate sentiment overall.