Economy

Japan Big Maker Sentiment Worsens: BOJ Tankan

Yomiuri Shinbun file photo
The Bank of Japan

Jiji Press

11:26 JST, April 1, 2025

Tokyo, April 1 (Jiji Press)—Business sentiment among large manufacturers in Japan worsened for the first time in four quarters due to sluggish overseas demand, soaring materials costs and concerns over U.S. President Donald Trump’s tariffs, the Bank of Japan’s “tankan” survey for March showed Tuesday.

The headline diffusion index for large manufacturers’ current business conditions fell to plus 12 from plus 14 in the previous December survey, the central bank said. The DI represents the percentage of companies seeing good business conditions minus that of those feeling the opposite.

The current business conditions DI for large nonmanufacturers rose from plus 33 to plus 35 thanks to robust demand from visitors to Japan and progress in efforts to pass on rising costs to customers. The reading marked the highest level since August 1991, when the figure was at plus 41.

The business outlook DI toward June stood at plus 12 for large manufacturers and plus 28 for large nonmanufacturers. The current business conditions DI for small manufacturers grew by 1 point to plus 2, improving for the third straight quarter. The DI for small nonmanufacturers was unchanged at plus 16. Capital spending by large companies in fiscal 2025, which started Tuesday, is forecast to rise 3.1 pct from the previous year. On an all-company basis, surveyed firms assume an average exchange rate of ¥147.06 per dollar for the fiscal year.