Latest News Stream - Reuters Tankan Index

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 stood at +13 in July 2026, unchanged from the previous month after rising over the previous two months, supported by solid semiconductor demand. Manufacturers reported a recovery in the semiconductor market, including memory-related demand, alongside rapidly expanding orders for products used in chip applications and AI servers. "Order volumes and values are at levels we've never seen before, and we're concerned about production capacity," a manager at a precision machinery maker said. Meanwhile, non-manufacturers' sentiment fell to +25 from +32 as the Middle East conflict, a weak yen, and rising interest rates pushed up costs. Looking ahead, manufacturers expect sentiment to edge up to +14 in October, while non-manufacturers see their index holding at +25 as businesses continue to assess the fallout from geopolitical risks and supply chain challenges.

The Reuters Tankan index for Japanese manufacturers climbed to +13 in June 2026 from +8 in May, marking a second straight month of improvement as strong semiconductor demand boosted confidence among chemicals, electronics, and machinery producers. The chemicals sector index surged to +20 from +6, while firms cited booming orders tied to the chip market despite ongoing geopolitical tensions. Meanwhile, non-manufacturers’ sentiment rose to +32 from +29, supported by stronger confidence in the real estate and construction sectors and a steady pipeline of new projects. Looking ahead, manufacturers expect sentiment to remain at +13 in September, while non-manufacturers see their index easing to +19 amid concerns over geopolitical risks and supply chain challenges. The transport machinery sector, including automakers, turned notably cautious, with its outlook falling to -13 from +13, reflecting persistent material sourcing difficulties and supply chain disruptions.

The Reuters Tankan index for Japanese manufacturers edged up to 8.0 in May 2026 from 7.0 in April, as commodity-related industries recovered from the sharp deterioration caused by the Iran war. Improvements were seen in chemicals, steel, and nonferrous metals, supported by front-loaded demand and a rebound in materials sectors. However, the recovery in overall factory sentiment remained limited, as confidence among transport machinery firms, including automakers and suppliers, weakened further amid supply constraints linked to disruptions in the Strait of Hormuz. Food processors and textile-related industries also remained deeply pessimistic due to rising raw material costs and the weak yen. Meanwhile, non-manufacturers’ sentiment fell to 29.0 from 31.0. Both manufacturing and services firms expect conditions to weaken further by August amid ongoing concerns over the Iran war, supply disruptions, and elevated energy costs.

The Reuters Tankan index for Japanese manufacturers fell to 7.0 in April 2026, down sharply from 18.0 in the previous month, marking the biggest monthly drop since January 2023 and the first decline in three months. The latest reading pointed to a clear deterioration in business sentiment, as surging oil prices and supply-chain disruptions stemming from the Middle East conflict drove up input costs and weighed on operations. Lingering uncertainty over global trade conditions, alongside currency volatility, including a weaker yen, further clouded the outlook. As a result, firms have turned more cautious, scaling back expectations for production and capital spending in the months ahead.

The Reuters Tankan index for Japanese manufacturers jumped to +18 in March 2026 from +13 in February, marking its strongest level since December 2021, as a near-term rebound in industrial momentum was supported by robust semiconductor-related demand and a pickup across key manufacturing sectors. The improvement was broad-based, led by chemicals and petroleum-linked industries, where sentiment surged alongside stronger demand tied to the semiconductor cycle. Transport machinery, a core pillar of Japan’s export economy, also showed resilience amid solid vehicle production and healthy order books. Meanwhile, the steel and non-ferrous metals segment remained deeply negative due to weak demand linked to the auto sector. Looking ahead, manufacturers expect sentiment to ease to +14 by June, reflecting rising uncertainty from the Middle East conflict, elevated input costs, and external demand risks.

The Reuters Tankan index for Japanese manufacturers rose to +13 in February 2026 from +7 in January, marking the first improvement in three months, driven by firmer machinery orders and a weaker yen. Machinery producers recorded the sharpest gain, with their sub-index climbing to +15 from 0. One manager cited “a certain level of visibility for orders, sales, and profits,” while another noted that confidence was underpinned by the yen’s weak yet stable trajectory. A softer currency typically supports exporters’ earnings when overseas profits are repatriated. In contrast, sentiment in the transport machinery sector, which includes automakers and parts suppliers, deteriorated, with the index easing to +33 from +40. Respondents pointed to subdued domestic auto sales and tighter rare-earth export controls in China as key headwinds. Looking ahead, manufacturers expect overall sentiment to moderate to +10 over the next three months, suggesting caution despite the recent improvement.

The Reuters Tankan index for Japanese manufacturers fell to +7 in January 2026 from +10 in December, marking its weakest reading in six months as slowing demand from major economies weighed on materials heavy industries. Oil and ceramics saw one of the sharpest deteriorations, with sentiment dropping to zero, while steel slid deeper into negative territory and chemicals confidence also weakened. Firms pointed to subdued conditions across key export markets, with one steelmaker citing weaker Chinese demand for automotive related products. Others flagged softer consumer spending in the US and China, alongside the drag from tariffs on exports. Meanwhile, sentiment in autos and electronic machinery slipped only modestly, indicating parts of Japan’s industrial base remain more resilient than materials producers that are more exposed to the global cycle. Looking ahead, manufacturers expect confidence to recover to +10 by April.

The Reuters Tankan index for Japanese manufacturers fell to +10 in December 2025 from a near four-year high of +17 in November, as fiscal and growth concerns weighed on sentiment. Revised data showed that the economy contracted more than initially estimated in the third quarter. Prime Minister Sanae Takaichi’s large spending plans added to worries over Japan’s fiscal health, while expectations of a Bank of Japan rate hike this month further clouded the economic outlook. The steel and nonferrous metals sub-index dropped sharply to -33 in December from -11 in November, while the textiles, paper, and pulp sector remained flat for a second consecutive month. The monthly poll serves as a leading indicator for the BOJ’s quarterly Tankan survey.

The Reuters Tankan index for Japanese manufacturers edged down to 8 in May 2025 from an eight-month high of 9 in April, indicating a slight dip in business confidence. Companies expect conditions to deteriorate over the next three months, largely due to uncertainty surrounding shifting US tariff policies. While sentiment remains in positive territory—the overall tone has grown more cautious. This reflects broader concerns following Japan’s economic contraction in the first quarter and growing risks from global trade tensions. Some firms noted that US trade policies have delayed or frozen capital investment, further weighing on business conditions. In contrast, sentiment in the transport sector rose to its highest level since December 2023, supported by a rise in vehicle production. However, companies in the transport and metal products sectors expect a decline in sentiment ahead, citing tariff uncertainty, accelerating inflation, and a weakening Chinese economy.

The Reuters Tankan sentiment index for manufacturers in Japan jumped to +9 in April 2025 from -1 in March, marking the highest reading since August last year. Despite the upbeat current sentiment, the outlook for the next three months has darkened due to escalating concerns over U.S. trade policy. The index is projected to fall back to zero as Japan braces for a 10% tariff on its exports to the U.S. and a steep 25% duty on automobiles. Export-driven industries, particularly automotive and machinery, are sounding the alarm over declining orders and increased client caution. Uncertainty surrounding U.S. tariffs remains the dominant concern, though some companies also pointed to weakening demand from China and the impact of low-cost Chinese goods undercutting domestic sales.

Business sentiment among Japanese manufacturers declined to -1 in March 2025 from +3 in February, marking the first negative reading in three months. The drop reflects growing concerns over U.S. tariff policies and economic weakness in China. As an export-driven economy, Japan remains highly vulnerable to disruptions in global trade, particularly as the U.S. enforces tariffs on key trading partners. One respondent also noted the impact of China’s slowdown, stating: “Orders that had primarily come from China are now being shifted to production in Japan and other overseas locations.” Despite the current decline, sentiment is expected to recover in the coming months, with the index projected to rise to +4 by June. The monthly Reuters poll serves as a key indicator for the Bank of Japan’s quarterly Tankan business survey.