BOJ September 2024 Tankan Survey

◆The results of the BOJ September 2024 Tankan survey of corporate sentiment were as follows: business conditions DI (actual result) for large manufacturers were at +13%pt (0%pt change in comparison with the previous survey), while large non-manufacturers were at +34%pt (+1%pt in comparison with the previous survey). Business sentiment has improved more than expected recently, despite the negative effects some industries experienced from the typhoon which struck at the end of August.

◆Looking at the breakdown of large manufacturers, business conditions DI (actual result) declined for the basic materials industries due to the slowdown in the Chinese economy and other factors. Motor vehicles also worsened (-5%pt in comparison with the previous survey) due to the negative effects of the typhoon. On the other hand, electrical machinery improved (+10%pt) backed by the recovery of the silicon cycle. As for large non-manufacturers, business conditions DI (actual result) recovered rapidly for retailing (+9%pt), while services for individuals worsened significantly (-11%pt) due to the impact of the typhoon.

◆The FY2023 capex projection for all enterprises in all industries (incl. investment in properties, but not investment in software or research & development) is +8.9% y/y. Results were solid, with the March and June surveys following the same pattern of revision as in FY2021, when the planned values were close to each other. Manufacturing up by +17.0% and non-manufacturing up by +4.4%. While manufacturing’s planned values were at a high level, those of non-manufacturing were at their lowest point since 2021 surveys.