Japan Business Survey Index Large Manufacturing Firms

Japan's business survey index for large manufacturing firms rose to 6.3% in the fourth quarter of 2024, up from 4.5% in the third quarter, marking the highest level since the fourth quarter of 2021. This positive shift in sentiment supports a hawkish outlook on the Bank of Japan's monetary policy ahead of its December meeting. The survey coincided with final data showing that Japan's economy grew by 0.3% quarter-on-quarter in the three months to September, surpassing both the preliminary estimate and market expectations of 0.2%. The business survey index measures the difference between the percentage of firms expecting business conditions to improve versus those expecting deterioration. Looking ahead, large Japanese manufacturers are anticipating a slowdown in the coming months, with a forecasted index of 2.1% for the first quarter of next year.