The Reuters Tankan index for Japanese manufacturers rose for a second consecutive month in September 2026, climbing to +21 from +18 in August and reaching its highest level since December 2021. The improvement was underpinned by robust demand for semiconductors and data centers.
Semiconductor-related sectors were the main driver of the stronger manufacturing reading. The sub-index for electronics jumped to +39 from +24, supported by increased data center and semiconductor demand and reflecting AI-related investment flowing to Japanese suppliers of chips, testing equipment, and associated components. The precision machinery sub-index held steady at +29, while the reading for metal products edged up to +26 from +25. Textiles and paper improved sharply, rising to +13 from 0, whereas steel and nonferrous metals were unchanged at -13.
Sentiment among non-manufacturers also strengthened, rising to +29 from +28, supported by solid domestic consumption. Looking ahead three months, manufacturers expect sentiment to improve further to +27, while non-manufacturers anticipate conditions to remain stable at +27.
