BOJ December 2022 Tankan Survey

◆The results of the BOJ December 2022 Tankan survey of corporate sentiment were as follows: business conditions DI (actual result) for large manufacturers were at +7%pt (-1%pt in comparison with the previous survey), while large non-manufacturers were at +19%pt (+5%pt in comparison with the previous survey). Looking at the breakdown of large manufacturers, business conditions DI (actual result) for the processing industries improved at +2%pt (in comparison with the previous survey), while the basic materials industries worsened at -5%pt (in comparison with the previous survey), bringing downward pressure on overall results. In contrast to the large manufacturing industries, business conditions DI (actual result) for large non-manufacturing industries increased for a wide range of industries, reflecting the positive impact of the ongoing normalization of domestic economic activity.

◆Looking at DI of Domestic Supply & Demand Conditions for Products and Services (actual result), large manufacturers were at 0%pt (±0%pt in comparison to the previous survey) and large non-manufacturers were at -7%pt (+1%pt). As for the forecast, large non-manufacturers see business marking time, while large manufacturers expect the situation to worsen at -2%pt in comparison to the current survey. As for DI of Overseas Supply & Demand Conditions for Products (actual result), deterioration was seen in both the processing industries (-5%pt in comparison to the previous survey) and basic materials (-4%pt in comparison to the previous survey). While the tightening of domestic supply and demand appears to be stagnant, there are signs of easing in supply and demand centering on overseas markets.

◆The FY2022 capex projection for all enterprises in all industries (including investment in properties, but not investment in software or research & development) is +15.1% y/y. Looking at the projection by industry for enterprises of all sizes, manufacturers were at +20.3%, with non-manufacturers at +12.1%. Capex which had been planned for FY2021 but subsequently delayed has now appeared and this may have had a strong influence. However, expectations for progress in the normalization of economic activity will continue to boost corporate willingness to invest in capex.