The Tankan Survey is a comprehensive and influential economic report published by the Bank of Japan (BOJ) that provides valuable insights into the country’s economic condition.
The survey is closely watched by policymakers and analysts as it offers a snapshot of Japan’s business sentiment and serves as a leading indicator of the country’s economic performance.
It is considered a big market mover for JPY currency pairs.
What is the Tankan Survey?
Tankan is the Japanese abbreviation for Tanki Keizai Kansoku Chousa, the Short-Term Economic Survey of Enterprises in Japan.
The Tankan Survey has been conducted by the BOJ since 1957.
It is carried out on a quarterly basis, with results released in the first month of each quarter (January, April, July, and October).
The survey covers thousands of large, medium, and small-sized enterprises across various industries, including manufacturing and non-manufacturing sectors.
The main focus of the Tankan Survey is to assess business sentiment by measuring the “diffusion index” or “DI.”
How to Read the Tankan Survey
The Tankan Survey contains several diffusion indices, with the most significant one being the Business Conditions DI for large manufacturers.
The DI is calculated by subtracting the percentage of firms reporting unfavorable business conditions from those reporting favorable conditions.
The resulting figure can range from -100 (all firms report unfavorable conditions) to +100 (all firms report favorable conditions).
- A positive DI indicates that more firms report favorable conditions, suggesting economic optimism and growth.
- A negative DI implies that more firms report unfavorable conditions, indicating economic pessimism and contraction.
Changes in the DI are crucial, as they can signal shifts in economic trends, influencing monetary policy decisions by the BOJ and other market participants’ actions.
Why is the Tankan Survey important?
The Tankan Survey is a vital economic indicator for Japan, as it offers insights into business sentiment, capital expenditure plans, and employment conditions.
The survey results can impact financial markets, particularly the Japanese yen’s exchange rate, as investors and analysts use the data to gauge the country’s economic health and potential monetary policy shifts.
Strong Tankan Survey results can lead to yen appreciation, while weak results may cause depreciation.
Who publishes the Tankan Survey?
The Bank of Japan (BOJ) is responsible for conducting the Tankan Survey and compiling the data.
The BOJ ensures the survey’s accuracy and reliability by surveying a large and diverse sample of enterprises, guaranteeing a comprehensive representation of Japan’s business landscape.
When is the Tankan Survey released?
The Tankan Survey is published quarterly, with results released in the first month of each quarter (January, April, July, and October).
The report is publicly available on the Bank of Japan’s website, where interested parties can access the data and analyze the survey results.
Additionally, financial news outlets and market analysis platforms often provide coverage of the Tankan Survey upon its release, offering insights and interpretations of the report’s findings.