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Economic Calendar

Japan Business Sentiment Highest Since 2021

Japan’s Business Survey Index for large manufacturers rose to 7.6% in the third quarter of 2026 from -1.8% in Q2, far above market expectations of 2.5%. It was the fastest pace of improvement since Q4 2021, amid government efforts to boost GDP growth and stronger government spending. Looking ahead, manufacturing sentiment is expected to continue to expand, though at a softer rate, to 5.8% in Q4 and 4.9% in Q1 2027. The index, based on a survey of major manufacturers, remains a key barometer for an economy where industrial output plays a central role. The Bank of Japan raised its FY2026 GDP growth projection to 0.6% from 0.5% at its latest meeting, due to resilient domestic demand amid the government’s support measures. However, the board warned that underlying inflation could exceed the 2% target amid the ongoing conflict in the Middle East. For FY2027, the BoJ lifted its inflation forecast to 2.4% from 2.3%, while raising its GDP growth outlook to 0.8% from 0.7%.

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