Japan IT Services: June Tankan (detailed version) - hiring conditions looser, but no decline in service prices

Research evidence excerpt

Japan IT Services: June Tankan (detailed version) - hiring conditions looser, but no decline in service prices

Viewpoint |

01 Jul 2026 22:47:11 ET │ 13 pages

Japan IT Services

June Tankan (detailed version) - hiring conditions looser, but no decline

in service prices

Moriya Koketsu AC

CITI'S TAKE +81-3-6776-8304

The detailed edition of the BoJ Tankan June survey has been released. moriya.koketsu@citi.com

FY3/27 software investment plans for all industries (including financial

institutions) show +12.4% YoY, revised up by 5.3% from the March survey.

Japanese companies' demand for core system modernization remains

strong. The upward revision has been driven by food products (+204.5%

YoY), petroleum & coal products (+109.1%), and automobiles (+12.4%), all

industries that had faced concern related to the Middle East situation.

Meanwhile, our key focus in the survey is the improvement in the

employment DI. The June survey employment DI stands at -41 (+10 YoY, +9

QoQ), showing a rapid improvement in the hiring environment. This level

has not been seen since 2021. While software investment plans remain

strong, the easing hiring environment reflects supply-side loosening, which

we view as primarily due to AI's emerging impact.

Software investment plans — FY3/27 software investment plans for all industries

(including financial institutions) show +12.4% YoY, significantly improved from the

March survey and confirming unchanged IT investment momentum among

Japanese companies. In YoY terms, growth was especially strong at food products

(+204.5%) and petroleum & coal products (+109.1%). Automobiles (+12.4%), which

faced concerns due to the Middle East situation, also showed strength with a 5.0ppt

increase from the March survey. Despite market concerns about AI-driven