Japan Equity Strategy: BoJ June Tankan survey: Business conditions improved, capex plans revised upward

Research evidence excerpt

Japan Equity Strategy: BoJ June Tankan survey: Business conditions improved, capex plans revised upward

J P M O R G A N Global Markets Strategy

01 July 2026

Japan Equity Strategy

BoJ June Tankan survey: Business conditions

improved, capex plans revised upward

The June BoJ Tankan survey was released on July 1. The survey was answered Equity Strategy

ACduring a period when crude oil prices were declining off a peak, and business Rie Nishihara

conditions improved significantly for large manufacturers, reaching the strongest (81-3) 6736-8629

level in eight years. Non-manufacturers also stayed at a high level. By sector, the rie.nishihara@jpmorgan.com

business conditions DI improved in semiconductors (nonferrous metals, JPMorgan Securities Japan Co., Ltd.

production equipment) and, among non-manufacturers, readings improved in Yong Guo, CFA

accommodations, eating & drinking services, retail, and leasing, while conditions (81-3) 6736-8623

yong.guo@jpmorgan.com

deteriorated in electric and gas utilities, construction, and real estate. Companies JPMorgan Securities Japan Co., Ltd.

revised their USD/JPY assumptions to ¥152/$, still a level stronger than the

Mansi Das

prevailing rate. Companies raised their FY2026 guidance for sales, but due to (91) 2261 573343

conservative crude oil price assumptions, timing differences in pass-through to mansi.das@jpmchase.com

prices, and the impact of yen depreciation on domestic demand, guidance now calls J.P. Morgan India Private Limited

for net profit to decline by around 6%. However, we believe that the market

consensus forecast for growth in TOPIX EPS (IBES, Bloomberg, etc.) remains

strong at the 10-20% level and that guidance is simply too conservative. Capital

expenditure plans, supported by the promotion of growth investment under the