Japan business sentiment rises to three-quarter high in Q3
Japan’s Business Survey Index (BSI) for large manufacturing firms unexpectedly rose to 3.8% in the third quarter of 2025, up from -4.8% in the previous quarter — the lowest reading since Q1 2024.
The result easily beat market expectations for a decline to 3.3%, marking the highest level since Q4 2024 and the first return to positive territory in three quarters.
The improvement reflects a sharp rebound in exports, as firms front-loaded shipments to the US ahead of newly imposed 15% blanket tariffs.
Last week, US President Donald Trump signed an executive order to implement a trade deal with Japan, introducing 15% baseline tariffs on most Japanese goods, including automobiles.
The BSI, based on a survey of large Japanese manufacturers, serves as a key gauge of economic health in a country heavily reliant on industrial output.
Manufacturers remain optimistic about the months ahead, projecting a further rise to 3.9% in Q4, followed by a slight decline to 3.3% in Q1 2026.
UCapital Asset Management LLP or group companies may have commercial relationships with the companies mentioned. This content is not financial advice.
Sign up for free to ask the AI about this article.
Growth, inflation and rates across the major economies, with the impact on your business.