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Japan business confidence rises on semiconductor demand in August Tankan

The Reuters Tankan survey shows manufacturers optimism lifting to plus 18 in August and services confidence reaching plus 28, with semiconductor related industries driving gains across chemicals and metal and machinery.

Reported · Written up by our desk · Central Banks

Japan’s business confidence improved in August, supported by robust semiconductor demand, according to the latest Reuters Tankan survey that is widely watched as a leading indicator for the Bank of Japan’s quarterly Tankan.

The manufacturers’ sentiment index rose to plus 18 in August from plus 13 in July, the highest level since March 2026, while the non-manufacturers’ index climbed to plus 28 from plus 25, reflecting resilient domestic demand on the services side.

Semiconductor related industries drove the biggest improvement, with the chemicals sub-index jumping to plus 33 from plus 23, and the metal and machinery industry index rising to plus 25 from plus 12.

The survey period ran from 29 July to 6 August and included responses from 219 of the 510 firms polled, and it also showed a modest expected easing in the manufacturers’ three month outlook to plus 16 from plus 18, a nuance that may factor into expectations for the Bank of Japan’s upcoming Tankan.

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