Japan Business Survey Index Large Manufacturing Firms

Japan’s Business Survey Index for large manufacturers rose to 4.7% in Q4 2025, up from 3.8% in the prior quarter and marking the strongest reading this year. The result also beat expectations of 4.1%, underscoring continued resilience despite trade frictions, growth concerns and mounting fiscal risks. Firms also faced the prospect of Bank of Japan rate increases, with markets pricing in a December move followed by 2 to 3 additional hikes in 2026. Forward guidance points to softer conditions ahead, with manufacturing sentiment projected to ease to 1.1% in Q1 and 1.3% in Q2 2026. The index, drawn from a survey of major manufacturers, remains a critical barometer for an economy where industrial output plays a central role.