BoJ Tankan Surges to 22 as Sentiment Hits 8-Year High

Japan’s Q2 Tankan survey delivered the latest upside surprise, with large manufacturers’ sentiment jumping to 22—well above the 16 consensus and the highest since 2018. The strong reading caps a string of robust data releases that began with June’s composite PMI rising to 52.5, followed by Tokyo core CPI firming to 1.6% y/y, May retail sales surging 5.3% y/y, and industrial output expanding 0.5% m/m. While manufacturers’ September outlook eased to 17, the overall resilience reinforces expectations for further Bank of Japan policy normalization at the late-July meeting amid sticky inflation and tight labor markets.