On June 30, 2025, Japan's Tankan Small Non-Manufacturing Index recorded a minor decline, slipping from a score of 16 in the first quarter to 15 in the second quarter of this year. This economic indicator, closely watched for insights into the health of Japan's smaller, service-oriented businesses, reflects a slight decrease in business sentiment among these enterprises.
The dip from the previous quarter's reading signals a cautious outlook among small non-manufacturing businesses, which could be attributed to various economic pressures. Notably, this comes at a time when Japan's economy is facing challenges including fluctuating consumer demand and external economic factors impacting global trade.
Despite the minor decrease, the current level of the index suggests that small service-sector businesses in Japan maintain resilience but remain vigilant about the near-term economic environment. Analysts will be keeping a close eye on the upcoming quarters to see if this trend continues or if a recovery in sentiment is on the horizon for the non-manufacturing small business sector in Japan.
