Japan Reuters Tankan Index

The Reuters Tankan index for Japanese manufacturers rose to +13 in September 2025, its highest level since August 2022, boosted by easing trade uncertainties following a tariff deal with the US. Sentiment improved across six of nine manufacturing industries, led by autos and transport machinery. Managers in the sector reported steady overseas orders but noted that domestic production remained sluggish amid weaker exports in recent months. The positive shift came after US President Trump signed an executive order last week formalizing the trade pact with Japan, which includes a reduced tariff rate of 15% on key Japanese exports such as automobiles. The move helped alleviate concerns in Tokyo about the agreement’s implementation and provided a lift to business confidence. Looking ahead, manufacturers expect sentiment to ease modestly to +11 by December, reflecting concerns about a fragile domestic economy.