BOJ tankan to show manufacturers’ Q3 mood down slightly from Q2

Other data is expected to show nationwide core consumer prices were flat in August compared with the same month a year earlier as rising costs for energy and overnight stays offset lower mobile phone fees, analysts said.

The Bank of Japan’s (BOJ) quarterly tankan business sentiment survey was expected to show the headline index for big manufacturers’ sentiment fell to 13 from 14 in June, the poll of 17 economists showed on Friday.

“Durable goods sales have been strong until now, making up for a slump in service consumption,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

The mood among big non-manufacturers was also likely to fall slightly, but avoid slipping into net pessimism, coming in flat from plus 1 in June, the poll showed.

The forecasts were in line with a string of recent data that shows firms are facing renewed headwinds from the pandemic, which remain especially painful for service-sector firms.

For the three months ahead, big manufacturers’ optimism was expected to improve slightly to 15, while the large non-manufacturers’ outlook index was seen rising to plus 5, the poll showed.

Big firms will likely raise their capital spending plans by 9.1% for the current fiscal year as the outlook improves.

The BOJ will announce the tankan quarterly survey results at 8:50 a.m. on Oct. 1.

The central bank is set to maintain its massive stimulus at its Sept. 21-22 policy meeting, as supply bottlenecks caused by factory shutdowns in Asia and lacklustre consumption weigh on the economy.

Separate data due out on Sept. 24 is expected to show nationwide core consumer prices, which exclude fresh food but include oil products, were flat in August from a year earlier, the poll found.