Japan’s small manufacturers reported a marked improvement in business sentiment in the third quarter of 2026, with the Tankan Small Manufacturers Diffusion Index rising to 12 from 2 in the previous quarter.
The reading for the second quarter of 2026 had stood at 2, indicating only marginal optimism among smaller industrial firms. The move to 12 in the third quarter points to a significantly more positive outlook, suggesting a broader shift toward confidence in production, orders and operating conditions at the smaller end of Japan’s manufacturing sector.
The latest Tankan data, updated on 30 September 2026, underscore a notable quarter-on-quarter strengthening in sentiment that may signal improving momentum in Japan’s domestic industrial activity among small manufacturers.
