BOJ Q2 Tankan:

  • Tankan Large Manufacturing Index, 15 vs. expected 12, prior was 12 ... today's result is the first improvement for three quarters and the highest since March of 2014
  • Tankan Large Manufacturing Outlook, 16 vs expected 14, prior was 10
  • Tankan Large Non-Manufacturing Index, 23 vs. expected 22, prior was 19 ... third consecutive quarter of improvement (also highest since March of 2014)
  • Tankan Large Non-Manufacturing Outlook, 21 vs. expected 23, prior was 17
  • Large All-Industry Capex for Q2, 9.3% vs. expected 5.3%, prior was -1.2%
  • Tankan Small Manufacturing Index, 0 vs. expected 1, prior was 1
  • Tankan Small Manufacturing Outlook, 0 vs. expected 1, prior was 0
  • Tankan Small Non-Manufacturing Index, 4 vs. expected 5, prior was 3
  • Tankan Small Non-Manufacturing Outlook, 1 vs. expected 3, prior was -1

For anyone who has been watching the Japanese economy in the past year or so the pattern here is familiar ....

Large companies are generally showing decent improvement, but smaller companies not so much. Larger companies have seemingly benefitting from the falling yen ( which works to help boost exports) while smaller firms are not showing so much benefit.

The capex figure is very promising, it's the best since late in 2007

The data point has had little immediate impact on the yen...

On balance the survey is a slight positive for the yen, to the extent that signs of improvement in the Japanese economy diminish the likelihood of further BOJ easing. I reckon 'slight' is the most important word though .... this is not a game changer.