The Reuters Tankan index for Japanese manufacturers rose to +13 in February 2026 from +7 in January, its first improvement in three months, supported by stronger machinery orders and a weaker yen. Machinery producers posted the biggest advance, with their sub-index jumping to +15 from 0. One manager cited “a certain level of visibility for orders, sales, and profits,” while another noted that sentiment was bolstered by the yen’s weak but stable path. A softer currency typically boosts exporters’ earnings when overseas profits are converted back into yen.
By contrast, sentiment in the transport machinery sector—which includes automakers and parts suppliers—deteriorated, with its index slipping to +33 from +40. Survey respondents pointed to sluggish domestic auto sales and tighter Chinese export controls on rare earths as major headwinds. Looking ahead, manufacturers expect overall sentiment to ease to +10 over the next three months, indicating a cautious outlook despite the recent pickup.
