Japan's Business Survey Index (BSI) for large manufacturers improved to 6.3% in Q4 2024, up from 4.5% in Q3, reaching its highest level since late 2021.
Japan's business sentiment up, slows for Q1 2025
The positive sentiment bolsters expectations for a hawkish stance from the Bank of Japan ahead of its December policy meeting. The survey release aligned with final GDP data showing Japan’s economy expanded by 0.3% quarter-on-quarter in Q3, exceeding the preliminary estimate and market expectations of 0.2%.
What BSI means
The BSI reflects the balance between firms anticipating improved business conditions and those expecting a decline. Despite the recent improvement, manufacturers foresee a slowdown, with the index projected to drop to 2.1% in Q1 2025.
