Japan Business Mood and Inflation Expectations Rise
Japan's business mood improved in March as inflation expectations hit record highs. However, firms warn the Iran war and rising fuel costs cloud the outlook.
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Business sentiment in Japan showed marked improvement in the first quarter of 2026, according to the latest Tankan survey. The headline index for large manufacturers rose to +17 in March from +16 in December, surpassing market expectations and reaching its highest point since late 2021. This positive momentum was largely driven by sustained demand for artificial intelligence semiconductors and a reduction in trade policy uncertainty involving the United States.
