BoJ Tankan Survey Accelerates In Q2

Data from the Bank of Japan’s quarterly Tankan survey showed that manufacturing activity, based on the survey of manufacturers surged during the second quarter.

What is the BoJ Tankan survey?

The data showed that confidence in the manufacturing sector rose to the highest level in more than three years.

The positive data added to the optimistic sentiment that economic recovery in Japan was well underway. However there are still some weaknesses such as inflation.

The Tankan surveys does fall in-line with the BoJ’s view that it remains optimistic on the economy in the near to medium term.

Tankan manufacturing survey rises to 17

The Tankan survey’s headline reading on Japan’s large manufacturers on the business conditions rose to 17 in the quarter of June, compared to 12 from the three months ending March. This was slightly higher than the economists’ forecasts of 15.

BoJ Tankan Survey (Source: Japan Macro Advisors)

The business outlook also increased to 15, beating forecasts of 14. The business conditions index also showed an improvement, rising more than the forecasts that for the small and medium size manufacturers.

In the manufacturing sector, the biggest gains came from the petroleum and coal products which rose 19 points to reach 25. The biggest drag came from the lumber and wood products which fell 23 points to reach 24.

Japan’s non-manufacturing survey rose to 23 in June, compared to 20 in the quarter ending March. The data barely managed to meet the median estimates. It also showed that this was the second quarter of improvement and marked the highest level seen since December 2015.

Manufacturing PMI in June slows to 52.4 in June

Despite the increase in the Tankan survey, a separate report showed that the manufacturing PMI for June slowed to 52.4. For the month, the data also showed that the manufacturing activity continued to remain in expansion territory. The PMI reading of above 50 suggests an expansion in the sector.