Tuesday, June 18, 2024

Tankan Survey

The Tankan Survey is a comprehensive and influential economic report published by the Bank of Japan (BOJ), providing valuable insights into the country’s economic conditions.

The survey is closely watched by policymakers and analysts because it provides a snapshot of business confidence in Japan and serves as a leading indicator of the country’s economic performance.

It is considered a big market mover for the Japanese Yen currency pair.

What is Tankan Survey?

Tankan is the Japanese abbreviation of Tanki Keizai Kansoku Chousa, short-term economic survey of Japanese companies.

The Tankan Survey has been conducted by the Bank of Japan since 1957.

Conducted on a quarterly basis, results are announced in the first month of each quarter (January, April, July, October).

The scope of the survey covers thousands of large, medium and small enterprises in various industries such as manufacturing and non-manufacturing.

The main focus of the Tankan survey is to assess business sentiment by measuring the “Diffusion Index” or “DI”.

How to read Tankan Survey

The Tankan survey contains several diffusion indices, the most important of which is the DI, the business conditions of large manufacturers.

DI is calculated by subtracting the percentage of companies reporting unfavorable operating conditions from the percentage of companies reporting favorable operating conditions.

The resulting numbers can range from -100 (all companies report unfavorable conditions) to +100 (all companies report favorable conditions).

  • Positive DI indicates more businesses are reporting favorable conditions, indicating economic optimism and growth.
  • A negative DI means more businesses are reporting adverse conditions, indicating economic pessimism and contraction.

Changes in the DI are critical because they can signal changes in economic trends and influence monetary policy decisions by the Bank of Japan and other market participants.

Why is the Tankan survey important?

The Tankan survey is an important economic indicator for Japan as it provides insights into business confidence, capital spending plans and employment conditions.

The findings could impact financial markets, particularly the yen exchange rate, as investors and analysts use the data to gauge the country’s economic health and potential monetary policy shifts.

A strong Tankan survey result could cause the yen to appreciate, while a weak result could cause the yen to depreciate.

Who released the Tankan survey?

The Bank of Japan (BOJ) conducts the Tankan survey and compiles the data.

The Bank of Japan ensures the accuracy and reliability of the survey and the comprehensive representation of the Japanese business environment by conducting surveys on a large and diverse sample of companies.

When will the Tankan survey be released?

The Tankan survey is released quarterly, with results released in the first month of each quarter (January, April, July and October).

The report is publicly available on the Bank of Japan’s website, allowing interested parties to access the data and analyze the findings.

In addition, financial news media and market analysis platforms often report on the Tankan survey after it is released, providing insights and explanations of the report results.

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