Japan’s small businesses pared back capital spending again in the second quarter of 2026, according to the latest Tankan All Small Industry CAPEX data released on 30 June 2026. The indicator slipped to -8.3% in Q2 from -8.1% in the first quarter of 2026, signaling a marginal deepening in investment contraction among smaller firms.
The move from -8.1% to -8.3% suggests that small enterprises remain cautious about expanding production capacity and upgrading equipment, even as the broader economy seeks more durable growth drivers. With capital expenditure often seen as a forward-looking gauge of business confidence, the continued weakness in small-industry CAPEX may raise concerns about the strength and breadth of Japan’s investment recovery heading into the second half of 2026.
