Tankan

Now, business sentiment, uh, improved at large Japanese manufacturers in the three months through September.

According to the Bank of Japan Tankan survey, confidence, uh, picked up for the sixth straight quarter, supported by AI-related demand.

Now, in the bank's survey released on Thursday, the sentiment index came in at plus twenty-four, or up two points from the previous quarter.

A positive number, it shows more companies are optimistic than pessimistic.

Today, we begin in Japan, where confidence among large manufacturers rose to the highest level in more than eight years.

This is the BOJ's quarterly Tankan business survey.

It also shows firms projecting an annual pace of inflation at two and half percent five years ahead.

Now, the previous report had that rate at two point six percent.

He is markets live rates and FX strategist, and he joins from Singapore.

Thank you for being here.

So you look at that Tankan data and you see continued resilience, can we say that, among Japanese companies? And I'm wondering whether any of this kind of changes expectations that the BOJ is gonna raise rates again, at least by December.

Would you say that's a safe bet?

On the subject of imprecise data, there are a series of manufacturing sentiment opinion polls due today, although these cannot perhaps be classed as data as such, uh, but merely expressions of biased and distorted opinion.

The Japan Tankan Survey of Business is the one that still commands some respect in financial markets.

Culturally, Japanese firms seem to show a greater willingness to answer questions and answer questions objectively rather than subjectively.

The Japanese data was not bad as such, but it was somewhat ambiguous, enough to cause a moderately more conservative assessment of the pace of Japan's rate hikes.

Sweden's manufacturing activity strengthened and beat consensus, while Dutch retail sales growth slowed.

In Asia, South Korea's trade surplus widened much more than expected, while Japan's Tankan showed improved manufacturing sentiment but softer non-manufacturing sentiment.

New Zealand building permits rebounded in August.

On the macro calendar, focus will be on September Challenger job cuts, weekly initial and continuing jobless claims, final September manufacturing PMI, August construction spending, and the September ISM Manufacturing Index, followed by EIA natural gas inventories.

Asian currencies weakened as the dollar strengthened, while JGB and other regional sovereign yields moved higher.

South Korean exports surged to a record high in September on strong global AI demand, while regional manufacturing activity remained broadly expansionary.

In Japan, the BOJ's latest commentary reinforced its focus on preventing an inflation overshoot, while the BOJ Tankan survey for September was slightly softer than expected.

China Finance Minister Lan said Beijing is mulling additional fiscal policies to reach its own annual growth target.