The forecast for the Bank of Japan Tankan September survey indicates that the business conditions DI for large manufacturers is expected to rise 3 points from the previous survey to 25, while trends in price-related items are also drawing attention.
In the Bank of Japan Tankan (September survey), the business conditions DI for large manufacturers is expected to come in at 25, representing an anticipated 3-point improvement from the previous June survey. Non-manufacturers are also expected to maintain high levels, while business sentiment overall is forecast to remain elevated. Strong demand related to AI is supporting manufacturers, although some also point to persistently high crude oil prices as a headwind.
Among price-related items, as in the previous survey, attention is focused on upside moves in the sales price judgment DI and the price outlook. Cost pressures are emerging against the backdrop of heightened tensions in Iran, and price trends could influence the next phase of the economic cycle.
Capital investment across all company sizes and industries is expected to rise 8.0% year on year, representing an upward revision from the previous outlook. Views are shared that investment capacity remains ample, with labor shortages driving labor-saving investment and demand for AI-related investment, including data centers, remaining firm.
Following the release of the September survey in late September, it is expected to influence the Bank of Japan’s monetary policy decision. If high crude oil prices and elevated materials costs persist, attention will focus on the potential resurgence of price pressures and the impact on interest rates.