Japan's patchy business mood takes pressure off BOJ for immediate hike
EWJ•Japan's Tankan survey showed big manufacturers' sentiment rose to +24 in July-September, while big non-manufacturers' sentiment fell to +35. Companies' inflation expectations were 2.6% in three years, unchanged from three months earlier, easing pressure for an immediate Bank of Japan rate hike.
1. Mixed business confidence
The Tankan survey showed big manufacturers' business sentiment rose to +24 in September from +22 in June, its highest level since March 2018, but below the +25 analyst estimate. Big non-manufacturers' sentiment fell to +35 from +37, its first decline in five quarters and below the +36 forecast.
2. Inflation and rate outlook
Companies forecast inflation of 2.6% within three years and 2.5% in five years. The three-year expectation was unchanged from three months earlier, while the five-year forecast was slightly lower. The survey is among the data the BOJ will scrutinise at its October meeting after raising its policy rate to 1.25% in September.
