Japan Manufacturers' Mood Highest in Near 5 Years

The Reuters Tankan index for Japanese manufacturers rose for the fourth consecutive month to +27 in November 2026, from +22 in the previous month, marking its highest reading since August 2021, supported by continued strength in semiconductor and data center demand. Electronics surged to +39 from +25, with precision machinery, including chip equipment, leading the gains by climbing to +42 from +38, boosted by strong demand from both domestic and overseas markets. Other sectors also reported gains, with chemicals rising to +33 from +27, while oil refining and ceramics advanced to +25 from +14. Meanwhile, non-manufacturers’ sentiment increased to +35, the highest since June 2018, from +23, which was the lowest reading since November 2024, reflecting a sharp rebound in confidence in the service and domestic sectors. Looking three months ahead, manufacturers expect sentiment to improve to +28, while non-manufacturers expect sentiment to weaken to +29.

The Reuters Tankan index for Japanese manufacturers increased for the third consecutive month to +22 in October 2026 from +21 in the previous month, marking the highest reading since December 2021, supported by solid semiconductor and data center demand. Precision machinery, including chip equipment, led the gains, surging to +38 from +29, boosted by strong orders. Other sectors also reported gains, including metals, which rose to +35 from +26. Meanwhile, steel and non-ferrous metals jumped into positive territory, rising to +25 from -13. Meanwhile, non-manufacturers’ sentiment fell to +23 from +29, marking the lowest reading since November 2024, amid rising costs and interest rate hikes. Food producers posted the steepest decline, plunging to -40 from -25, weighed down by weaker demand and higher raw material costs. Looking three months ahead, manufacturers expect sentiment to improve to +23, while non-manufacturers expect sentiment to weaken to +21.

The Reuters Tankan index for Japanese manufacturers increased for the second straight month to +21 in September 2026 from +18 in the previous month, marking the highest reading since December 2021, supported by solid semiconductor and data centre demand. Semiconductor-related industries drove the manufacturing index higher, with the sub-index for electronics jumping to +39 from +24 on stronger data center and semiconductor demand, reflecting AI-related spending flowing to Japanese suppliers of chips, testing equipment, and related components. Meanwhile, precision machinery remained unchanged at +29, while metal products inched up to +26 from +25. On the other hand, textiles and paper surged to +13 from zero, while steel and nonferrous metals remained at -13. Meanwhile, non-manufacturers' sentiment increased to +29 from +28, buoyed by strong domestic consumption. Looking three months ahead, manufacturers expect sentiment to improve to +27, while non-manufacturers remained at +27.