Tokyo, Sept. 28 (Jiji Press)–The Bank of Japan’s “tankan” quarterly survey for September, due out Thursday, is expected to show an improvement in business sentiment among major Japanese manufacturers, according to forecasts by private think tanks. Many think tanks, including Daiichi Life Research Institute Co., expect demand related to artificial intelligence and semiconductors to boost business sentiment. The average forecast from 12 think tanks put the headline diffusion index for large manufacturers’ current business conditions at plus 26, up 4 points from the previous June tankan. The DI represents the percentage of companies seeing good business conditions minus that of firms seeing them as poor. Based on the results of the latest tankan survey, the BOJ will analyze inflationary risks stemming from higher crude oil prices and AI-related demand as it weighs the timing of an additional interest rate hike. Sentiment among major manufacturers is expected to improve for the sixth consecutive quarter. The prevailing view was that industries related to semiconductor manufacturing equipment and materials, including electrical machinery and production machinery manufacturers, are performing well. Meanwhile, some economists said that sluggish growth in vehicle exports could weigh on sentiment among companies in the automobile sector. The index for large nonmanufacturers’ current sentiment is forecast at plus 36, down 1 point from the previous survey. Nomura Securities Co. cited weak inbound demand as a drag on sentiment, while Japan Research Institute Ltd. predicted a negative impact from rising costs such as fuel and labor expenses. END [Copyright The Jiji Press, Ltd.]
