Japanese Firms Lift 1-Year Inflation View to 2.7% as Manufacturer Sentiment Jumps to +22
Updated
Updated · investinglive.com · Jul 1
Japanese Firms Lift 1-Year Inflation View to 2.7% as Manufacturer Sentiment Jumps to +22
3 articles · Updated · investinglive.com · Jul 1
Summary
2.7% was the average inflation rate Japanese companies expected over the next year in the BoJ’s June Tankan, up from 2.6%, while three- and five-year expectations both rose to 2.6%.
+22 was the June reading for large manufacturers’ sentiment, up from +17 and well above the Reuters forecast of 16; large non-manufacturers hit +37 and small manufacturers reached +9, also beating estimates.
11.5% capital spending growth is now projected by large firms for FY2026/27, topping the 10.5% forecast even as they expect recurring profits to fall 6.7%, suggesting investment plans are holding up under margin pressure.
-37 on the employment diffusion index showed labor shortages remained severe, while firms based FY2026/27 plans on an average dollar-yen rate of 152.57.
The stronger sentiment and firmer inflation expectations reinforce the case for the Bank of Japan to keep normalizing policy as price pressures look more entrenched.