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Free AccessMNI: BOJ Tankan To Show Mixed Business Sentiment, Solid Capex
--Major Manufacturers’ DI Seen at +10 Vs. +9 in June
--Major Non-Manufacturers’ DI Seen at +12 Vs. +13 in June
The Bank of Japan's September Tankan survey is expected to show sentiment among major manufacturers improved slightly but sentiment among major non-manufacturers is projected to have fallen, economists predicted.
Manufacturers’ sentiment has improved on recovering demand and easing supply-side disruptions but non-manufacturers have been weighed down by high costs caused by rising resource prices and a surge in Covid-19 cases.
The BOJ will release the outcome of its Tankan quarterly business survey for September conducted from early August to September 30 at 0850 JST on October 3, Monday (2350 GMT on October 2, Sunday).
Economists expect the diffusion index (DI) for sentiment among major manufacturers to rise to +10 from +9 in June. Forecasts ranged from +8 to +12.
The diffusion index is calculated by subtracting the percentage of companies reporting deteriorating business conditions from those reporting an
improvement. A positive figure indicates the majority of firms see better business conditions.
The median forecast for the DI for major non-manufacturers is +12 in September, down from June’s +13. The forecasts ranged from +10 to +15.
The sentiment index for small manufacturers is projected to be unchanged from June at -4. The sentiment for small non-manufacturers is forecast to fall to -3 from -1.
The Tankan will show that capital investment plans by major firms are expected to be revised down slightly from the strong estimates three months ago, indicating that demand for capex remains solid. A small downward revision in September compared to three months ago typically occurs.
Capital investment plans by major firms will be revised down to +18.2% from +18.6% in June. Capex plans by smaller firms are expected to rise 1.6% in September, up from -1.4% made in June.
BOJ officials are also focused on how corporate price-setting has evolved amid a combination of high raw material prices and recovering private consumption, although smaller firms are having difficulty transferring high costs to retail prices.
Households have no choice but to accept the rising cost of essential daily items and cost-push inflation is eating into the purchasing power of consumers.
They are also focused on whether inflation expectations held by businesses have been rising up.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.