Japanese Manufacturers Hit Four-Year Optimism High

Large Japanese manufacturers reported their highest business optimism in over four years, despite global uncertainties. This positive sentiment is drawn from the Bank of Japan's quarterly Tankan survey, a crucial gauge of business sentiment across Japanese companies.

Manufacturing Sector Soars

The optimism index for large Japanese manufacturers climbed to 17 in the first quarter of 2026, marking an increase from 15 in the preceding quarter. Published on April 1, this figure surpassed economists' expectations of 16 and represents the highest level since the fourth quarter of 2021, according to LSEG data.

A positive Tankan figure indicates that optimistic companies outnumber pessimistic ones.

Carlos Casanova, senior economist for Asia at UBP, noted that solid profits were a significant contributor to this optimism, successfully offsetting pressures stemming from higher energy costs.

Non-Manufacturing Sustains High

Sentiment among large non-manufacturers held steady at 36, a multi-decade high, consistent with the previous quarter's revised figure. This robust performance also exceeded Reuters poll expectations of 33.

Market Reacts Positively

Following the release of the survey data, the Nikkei 225 experienced a notable increase of 4.48% on Wednesday. Market activity was notably influenced by hopes for a resolution to the Iran conflict.