Overview
- The BOJ’s June Tankan found firms raised their one‑year inflation expectation to about 2.7% and lifted three‑ and five‑year readings to roughly 2.6%, signaling price gains may stick.
- Sentiment among large manufacturers jumped to +22 and large non‑manufacturers rose to +37, the highest readings in years and above economists’ forecasts.
- Large companies plan about an 11.5% rise in capital spending for fiscal 2026/27 even as they expect recurring profits to fall roughly 6.7%, showing they will invest despite margin pressure.
- The employment diffusion index stayed deeply negative at around −37, indicating widespread labour shortages that can push up wages and sustain inflationary pressure.
- The Tankan is a key BOJ gauge of corporate mood and price expectations, and its stronger readings have boosted market and economist bets that the central bank will continue normalising interest rates.