Japan's Finance Ministry and Cabinet Office survey showed the business conditions index for large firms rising from minus 0.5 to plus 5.3 in July-September. Manufacturing and nonmanufacturing readings were positive, while the small-firm index remained at minus 10.9. Companies across all size groups expect fiscal 2026 sales, profits and capital investment to increase.
The Finance Ministry and Cabinet Office survey put the business conditions index for large firms at plus 5.3 in July-September. The measure had been minus 0.5 in the previous quarter and returned to positive territory after two quarters. It is calculated by subtracting the share of firms reporting deterioration from the share reporting improvement, so a positive reading means improvers were the larger group.[1], [2], [3]
The index for large manufacturers rose from minus 1.8 to plus 7.6, while large nonmanufacturers increased from plus 0.3 to plus 4.2. Production machinery registered plus 23.4 and information and communications equipment plus 19.9. The service category covering hotels and restaurants stood at plus 7.6, and finance and insurance at plus 3.4. The reports cite semiconductor-equipment demand and increased hotel and restaurant customers as supportive factors.[1], [2], [3]
Midsize companies recorded plus 0.8, while the small-firm index remained at minus 10.9. Even so, companies in every size group expect sales and profits to rise in fiscal 2026, and capital investment plans point to an 11% increase. A Finance Ministry official said the impact of the war in Iran had eased from the previous quarter, while recent crude-oil price increases meant officials would continue monitoring corporate activity closely.[2]
