Japanese manufacturing confidence has surged to a four-year high, driven by a semiconductor recovery and strong demand in chemicals and petroleum. The latest Reuters Tankan poll reveals the sentiment index climbed to plus 18 in March, the strongest reading since December 2021.
However, geopolitical tensions in the Middle East and sluggish Chinese demand cast a shadow over the future outlook. Executives warn the U.S.-Iran conflict has created uncertainty, prompting a wait-and-see approach in sectors like textiles and paper.
While transport machinery remains robust, steel sectors linger in negative territory. Looking ahead, manufacturers expect sentiment to cool to plus 14 by June. Meanwhile, the Bank of Japan is expected to hold interest rates steady this Thursday, signaling resolve despite global instability.