The Bank of Japan’s September Tankan survey reconfirmed the robustness of the corporate sector, with capital investment plans and earnings outlooks remaining at high levels. Price expectations are broadly flat, but vigilance over inflation is expected to continue.
The Bank of Japan’s September Tankan survey showed that the business conditions DI for all sizes and industries improved from the previous survey, indicating continued resilience in business sentiment. Although the DI for large manufacturers was below expectations, the improving trend continued, with particularly notable gains in sentiment among small and midsize enterprises.
By sector, demand for production machinery and electrical machinery remained firm in manufacturing, while non-manufacturing also held at high levels. Improvements among midsize and small enterprises contributed to the overall rise in the DI.
Capital investment plans maintained strong growth in fiscal 2026, rising 7.6% year on year across all sizes and industries and 11.3% among large enterprises, remaining at high levels. Together with upward revisions to corporate earnings, this indicated that investment appetite remains strong.
Price-related indicators, including input price and output price judgments, edged lower, but price expectations across all sizes and industries remained at 2.6% one year ahead, 2.6% three years ahead and 2.5% five years ahead, flat to slightly lower. Longer-term vigilance remains, but the urgency of additional rate hikes has eased somewhat.