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Japan factory sentiment climbs to best level since Dec 2021

The Reuters Tankan survey showed manufacturers at +21 in September, up from +18 in August, led by electronics and AI-driven data center demand.

Reported · Written up by our desk · Central Banks

Japan’s factory sentiment rose to its highest level since December 2021, according to a Reuters Tankan monthly poll cited by Forexlive. The Reuters Tankan manufacturer index climbed to +21 in September from +18 in August, while non-manufacturers edged up to +29 from +28.

Forexlive said the broad based improvement, not just a single sector spike, strengthens the case for continued Bank of Japan policy normalization. With both current and forward looking gauges moving higher, the BOJ has more room to look through near term noise when weighing its quarterly Tankan and future rate decisions.

The yen could see modest support from expectations of a firmer BOJ policy path, Forexlive added, though risks flagged in the poll include Middle East tensions, input costs, and softer domestic consumption that could keep any reaction measured.

Forexlive noted traders are likely to treat the survey as a leading signal for the BOJ’s official Tankan rather than a standalone catalyst, with attention also on the Nikkei 225’s potential for modest support from resilient corporate conditions. The poll was conducted from August 26 to September 4, with responses from 224 of 510 firms, and electronics was the standout performer, with its sub index rising to +39 from +24.

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