BOJ September 2021 Tankan Survey

◆The BOJ September 2021 Tankan survey of corporate sentiment improved in both manufacturing and non-manufacturing in comparison to the previous survey, with business conditions DI for large manufacturers at +18%pt, up by +4%pt in comparison to the previous survey, and large non-manufacturers at +2%pt, up by +1%pt. The level of business conditions DI differs greatly between manufacturing and non-manufacturing. But while the gap remains between industries, business conditions DI in manufacturing, which has stood out since the coronavirus crisis, appears to be gradually moving toward a pause in its rapid improvement.

◆Business conditions DI (forecast) for large manufacturers was at +14%pt (-4%pt in comparison with the current survey), while large non-manufacturers were at +3%pt (+1%pt). In the manufacturing industry, the forecast is expected to deteriorate in many of the materials industries whose business conditions DI (actual result) have improved across the board.

◆The FY2021 capex projection for all enterprises in all industries (incl. investment in properties, but not investment in software or research & development) is +7.9% y/y, revised upwards from the previous survey’s +7.1%. The manufacturing industry overall shows a favorable outlook for the future at +12.0%, reflecting the global economic recovery.