Tankan Survey Mixed, But Large Manufacturing Outlook Back To Late 2021 Highs

Japan's Tankan data print was mixed. Large manufacturing sentiment was slightly better than forecast For Q2. The headline index rose to +13, versus +11 forecast and +11 prior. The outlook for this segment was also better than forecast (+14, +11 forecast and +10 prior).

• For large non-manufacturing firms, the headline was +33 in line with forecasts, but down a touch from Q1's +34. This headline read is a touch off highs back to the early 1990s. The outlook was +27 for this segment, slightly below forecasts.
• Capex intentions were +11.1%, also below forecasts but up on the Q1 print.
• For smaller manufacturing firms we were in line for manufacturing firms (-1, outlook 0). For non-manufacturing firms we were a touch below expectations (+12, versus +13 forecast).
• The data will be encouraging for the BoJ, albeit at the margins. The outlook for large manufacturers is back to late 2021 highs. The central bank, and the authorities, will be hoping this drives improved growth outcomes.
• Other data showed Q1 GDP growth revised to a -2.9% annualized outcome (-1.8% originally reported).