MNI BRIEF: BOJ Tankan To Show Better Sentiment, Price Views

The Bank of Japan's September Tankan survey will show that business sentiment slightly improved and capital investment plans were revised up from three months ago, economists predicted.

BOJ officials are focused on how inflation expectations held by businesses are evolving amid the drop of import prices. The BOJ will release the outcome of its Tankan quarterly business survey for Sept. at 0850 JST on October 2, Monday (2350 GMT on October 1, Sunday).

Eased supply-side restrictions and the recovery in services and inbound tourists has boosted business sentiment, and economists expect the diffusion index (DI) for sentiment among major manufacturers to rise to +6 in Sept. from +5 in June. A positive figure indicates the majority of firms see better business conditions.

Economists predict the DI's median forecast for major non-manufacturers will print at +24 in Sept., up from June’s +23, while the sentiment index for small manufacturers will rise to -4 from -5. The sentiment for small non-manufacturers is forecast to rise to +12 from +11.

Capital investment plans by major firms this fiscal year are expected to rise 13.9%, revised up from 13.4% in the June Tankan. Smaller firm capex plans are expected to rise 4.4% vs +2.4% in the June Tankan.