Japan Q2 Tankan survey showed large manufacturing index deteriorated to the worst level in nearly three years. But, improvements was seen in the non-manufacturing sector. Capital expenditure also held up well. Overall, the set of data argues that while the economy is stagnating, it’s not falling off the cliff. And, BoJ will likely maintain its baseline of moderate expansion.
- Large Manufacturing Index dropped to 7, down from 12 and missed expectation of 9, lowest since September 2016.
- Large Manufacturers Outlook dropped to 7, down from 8, but beat expectation of 6.
- Large Non-Manufacturing Index rose to 23, up from 21, beat expectation of 20.
- Large Non-Manufacturing Outlook dropped to 17, down from 20, missed expectation of 19.
- All industry capex rose 7.4%, up from 1.2% but missed expectation of 8.1%.
