MNI BRIEF: BOJ Tankan To Show Little Change - Economists

MNI (TOKYO) - The Bank of Japan's September Tankan survey will show the benchmark business sentiment has changed little over the quarter, while capital investment plans among small and larger firms remains solid, according to private economists.

Automobile production, demand for semiconductors and strong inbound tourist flow will boost business sentiment, despite ongoing labour shortages and high costs.

Economists expect the diffusion index (DI) for sentiment among major manufacturers at +14, up from June's +13. Forecasts ranged from +12 to +14. A positive figure indicates the majority of firms see better business conditions. The median DI forecast for for major non-manufacturers was +32 in September, down from June's +33. Forecasts ranged from +28 to +35.

Economists predicted the sentiment index for small manufacturers to be -1, unchanged from June's result, while the print for small non-manufacturers is forecast at +11, down from +12.

The Tankan will show major and smaller firms capex this fiscal year will rise 12.0% and 2.9%, revised up from June's 11.1% and -0.8%. While solid, labour shortages and high costs will delay implementation. 

BOJ officials are focused on whether businesses are expecting high sales and input prices to measure the strength of corporate price-setting. (See MNI BOJ WATCH: Board To Hold, Examine Economy, Price Risks) 

The BOJ will release its September Tankan quarterly business survey results on 1 Oct at 0850 JST.