The Bank of Japan quarterly Tankan Index of Sentiment at Large Manufacturers rose to 17 in the second quarter of 2017 from 12 in the preceding period and above market expectations of 15. The print marked the third straight quarter of improved confidence and the highest reading since Q1 2014. Improved sentiment was mainly driven by petroleum and coal products (25 from 6 in Q1). Conversely, the largest drop was from lumber and wood products (24 from 47). Outlook for big manufacturers edged up to 15, and business conditions exceeded expectations for small and medium sized manufacturers. Meanwhile, big firms plan to raise their capital expenditure by 8 percent in the current fiscal year, compared with forecasts for a 7.4 percent rise, the survey showed. Business Confidence in Japan averaged 0.52 from 1983 until 2017, reaching an all time high of 53 in the second quarter of 1989 and a record low of -58 in the first quarter of 2009.
Japanese small business confidence
Japan Business Confidence

In Japan, the quarterly Tankan Index of Sentiment at Large Manufacturers covers about 1,100 companies with capital over 1 billion Yen. The survey is done by mail or e-mail and asks participants to evaluate current trends and conditions in the business place and their respective industries as well as their expected business activities for the next quarter and year. The indicator is calculated by subtracting the percentage share of enterprises responding on the negative side from the share giving positive assessments. The index varies on a scale of -100 to 100 such that a value above zero indicates business optimism, a value below zero pessimism and 0 indicates neutrality.