BOJ Tankan Likely to Show Slightly Stronger Biz Sentiment

Tokyo, Dec. 12 (Jiji Press)–The Bank of Japan’s “tankan” quarterly survey for December, due out Monday, is expected to show narrow improvements in business sentiment among both major Japanese manufacturers and nonmanufacturers, estimates by 11 private think tanks have shown. The think tanks expect that the impact of high U.S. tariffs will be limited, and that private consumption will remain firm despite continuing inflation. BNP Paribas Securities (Japan) Ltd. said that the tankan outcome is likely to help the BOJ decide to raise the policy interest rate, as widely expected, at its policy-setting meeting over two days through Friday. The think tanks forecast on average that the headline diffusion index for current sentiment among large manufacturers will stand at plus 15 in the upcoming report, up 1 point from the previous September survey. Sentiment is seen propped up by a retreat in uncertainty regarding the U.S. tariffs, as well as higher earnings at exporters thanks to the cheap yen. “The benefits of the global artificial intelligence boom” are also providing support, according to Mitsubishi UFJ Research and Consulting Co. The DI for current business conditions among large nonmanufacturers is projected at plus 35, up 1 point. Consumer sentiment remains rosy thanks to rising stock prices and wages. Meanwhile, the business condition outlook DI toward March 2026 is forecast to worsen for both manufacturers and nonmanufacturers. Norinchukin Research Institute Co. said there are concerns over weaker inbound tourist demand due to deteriorating Japan-China relations, which is seen weighing on nonmanufacturers. The DI is calculated by subtracting the percentage of companies reporting bad business conditions from that of those seeing good conditions. END [Copyright The Jiji Press, Ltd.]