Bank of Japan Tankan Shows Large Manufacturer Sentiment at Plus 24

The Bank of Japan’s Research and Statistics Department released the September 2026 Tankan on October 1, 2026, with the survey’s business-conditions diffusion index for large manufacturers rising 2 points from the June survey to plus 24 while the index for large nonmanufacturers fell 2 points to plus 35.

The responding period ran from August 26 to September 30, 2026. The survey sampled 9,104 enterprises, 3,776 in manufacturing and 5,328 in nonmanufacturing, with a response rate of 99.4 percent. Large enterprises accounted for 1,631 of the sample at a 99.0 percent response rate, medium-sized enterprises for 2,589 at 99.1 percent, and small enterprises for 4,884 at 99.6 percent.

The business-conditions DI is calculated as the percentage of enterprises answering “favorable” minus the percentage answering “unfavorable,” in percentage points. Among large manufacturers, 30 percent answered favorable and 6 percent unfavorable in the September survey, compared with 27 percent and 5 percent in the June survey.

The September survey put the large manufacturers’ DI at plus 24, up from plus 22, with respondents forecasting 21 for the December 2026 survey. Large nonmanufacturers came in at plus 35, down from plus 37, with a forecast of 30. Medium-sized manufacturers rose 6 points to plus 23, with a forecast of 18, while medium-sized nonmanufacturers fell 2 points to plus 24, with a forecast of 19. Small manufacturers rose 5 points to plus 14, with a forecast of 12, and small nonmanufacturers were unchanged at plus 15, with a forecast of 10. Across all enterprises and all industries, the DI rose 3 points to plus 21, with a forecast of 15.

Within large manufacturing, production machinery rose 7 points to 43 with a forecast of 44, nonferrous metals rose 9 points to 45, petroleum and coal products rose 27 points to 36 with a forecast of 45, and iron and steel swung to plus 6 from minus 6. Electrical machinery rose 4 points to 33, general-purpose machinery was unchanged at 38, and motor vehicles slipped 1 point to 11 with a forecast of 10. By category, basic materials rose 7 points to 25 and processing rose 2 points to 25. In large nonmanufacturing, construction rose 4 points to 56, real estate held at 52 with a forecast of 41, information services eased 1 point to 51, accommodations and eating and drinking services fell 8 points to 38, and goods rental and leasing fell 4 points to 46 with a forecast of 27.

Sales, Profits, and Exchange-Rate Assumptions

According to the survey summary, large manufacturers forecast fiscal 2026 sales up 7.6 percent year on year, a revision rate of plus 3.4 percent from the June survey; within that total, they projected domestic sales up 5.9 percent and exports up 10.3 percent. Large nonmanufacturers forecast a 4.3 percent rise, putting large enterprises across all industries at plus 5.7 percent. All enterprises across all industries forecast fiscal 2026 sales up 4.1 percent, a revision rate of plus 1.6 percent, after a 2.9 percent increase in fiscal 2025. The survey calculates revision rates as the percentage change of the figures between the current and previous survey.

Large manufacturers projected fiscal 2026 current profits up 13.6 percent, a revision rate of plus 21.7 percent, after a 3.2 percent rise in fiscal 2025, while large nonmanufacturers projected a 4.7 percent decline. All enterprises forecast a 2.2 percent increase after 7.1 percent growth in fiscal 2025, and small enterprises forecast a 5.6 percent decline. The ratio of current profit to sales is forecast at 12.81 percent for large manufacturers, against 12.13 percent in fiscal 2025, and at 7.47 percent for all enterprises, against 7.61 percent. Net income is forecast up 14.4 percent for large manufacturers and up 2.6 percent for all enterprises, the latter after a 9.0 percent rise in fiscal 2025.

Enterprises’ average predicted exchange rate for fiscal 2026 moved to 154.23 yen per U.S. dollar from 152.57 yen in the June survey, with 154.46 yen assumed for the first half and 154.00 yen for the second half. The euro assumption moved to 177.86 yen from 175.62 yen.

Fixed investment including land purchasing expenses, a measure that excludes software and R&D investment, is forecast to rise 7.6 percent for all enterprises in fiscal 2026, a revision rate of plus 0.8 percent, after a 9.4 percent increase in fiscal 2025. Large enterprises forecast an 11.3 percent rise, with large manufacturers at plus 11.6 percent and large nonmanufacturers at plus 11.2 percent. Medium-sized enterprises forecast a 7.3 percent rise, while small enterprises forecast a 4.7 percent decline. Software, R&D, and fixed investment excluding land purchasing expenses is forecast up 9.3 percent for all enterprises, with software investment alone up 10.3 percent and R&D investment up 5.0 percent; land purchasing expenses are forecast down 22.6 percent.

The production-capacity DI for large manufacturers moved to minus 2 from zero, with a December forecast of minus 4, and the all-enterprises manufacturing reading moved to minus 4 from minus 2. The employment-conditions DI for all industries, which subtracts the share of enterprises reporting insufficient employment from the share reporting excessive employment, stood at minus 38 for all enterprises, against minus 37 in June, with a forecast of minus 41; small enterprises registered minus 42 and large enterprises minus 29.

Prices, Financial Conditions, and Overseas Activity

The output-price DI for large manufacturers was unchanged at 40, with a forecast of 40, while the input-price DI fell 3 points to 59 with a forecast of 55. Small manufacturers recorded an input-price DI of 71 and an output-price DI of 41, the latter with a forecast of 47. Both price DIs subtract the share of enterprises answering “fall” from the share answering “rise.” On supply and demand, the domestic DI for large manufacturers, “excess demand” minus “excess supply,” rose 3 points to minus 1, and the overseas reading rose 2 points to minus 1.

Enterprises’ average inflation outlook for general prices stood at 2.6 percent one year ahead, down 0.1 point from the June survey; 2.6 percent three years ahead, unchanged; and 2.5 percent five years ahead, down 0.1 point. The all-enterprises average for output prices stood at 3.5 percent one year ahead and 6.1 percent five years ahead.

On corporate finance, the financial-position DI, “easy” minus “tight,” improved 1 point to 13 for large enterprises and to 15 for medium-sized enterprises, and was unchanged at 8 for small enterprises. The lending-attitude DI of financial institutions, “accommodative” minus “severe,” slipped 1 point to 12 for large enterprises and held at 13 for all enterprises. The DI for the change in interest rates on loans rose 7 points to 68 for all enterprises, with a forecast of 71, and the conditions-for-CP-issuance DI for large enterprises was unchanged at 4.

The September survey also polled 323 financial institutions at a 99.4 percent response rate. The business-conditions DI for banks rose 2 points to 58 with a forecast of 59; financial products transaction dealers rose 2 points to 67 with a forecast of 54; insurance companies rose 12 points to 48; and financial institutions overall rose 3 points to 49 with a forecast of 44.

In the overseas business activities section, covering 588 enterprises at a 94.0 percent response rate, consolidated sales are forecast up 5.0 percent for all industries in fiscal 2026, with overseas sales up 3.4 percent; the share of overseas sales in total sales is forecast at 46.46 percent, against 47.18 percent in fiscal 2025. Consolidated current profits are forecast up 3.6 percent for all industries, with manufacturing up 6.6 percent and nonmanufacturing flat, and consolidated fixed investment is forecast up 9.1 percent, with overseas fixed investment up 8.6 percent and the manufacturing total up 13.1 percent.

The summary and outline were published on October 1, 2026, and the release index lists the Comprehensive Data Set and the BOJ Time-Series Data for the September survey as scheduled for release on October 2, 2026.