Japan Reuters Tankan Index

The Reuters Tankan index for Japanese manufacturers dropped to +6 in June 2025, marking a second consecutive monthly decline after readings of +9 in April and +8 in May. The weakening sentiment reflects growing caution among firms amid ongoing US tariff uncertainties and subdued Chinese demand. Japan remains in active negotiations with the United States to remove tariffs on its exports, including a 25% duty on automobiles and auto parts—key pillars of the country's industrial sector. One survey respondent noted: “Our clients remain hesitant about new capital expenditures due to sluggish conditions in China and persistent uncertainty around US tariff policy.” Looking ahead, the index is expected to ease further to +2 over the next three months. Despite the decline, the index staying in positive territory suggests that optimistic firms still slightly outnumber pessimists.