Japan manufacturers' mood hits near 5-year high on semiconductor demand: Reuters poll

TOKYO, Sept 9 — Business confidence among big Japanese manufacturers climbed in September to ​its highest level since December 2021, buoyed by robust semiconductor and data-centre-related demand, a Reuters monthly poll showed on Wednesday.

The Reuters Tankan sentiment ‌index for manufacturers rose to plus-21 from plus-18 in August, extending a steady recovery from plus-7 ⁠in April. Non-manufacturers' sentiment edged up ​to plus-29 from plus-28, staying within ⁠the range that has prevailed through 2025 and this year.

The poll, a ‌leading indicator of the ‌Bank of Japan's quarterly Tankan business survey, was conducted from August ⁠26 to September 4 and received responses ⁠from 224 out of 510 firms. The indexes are calculated by subtracting the percentage of pessimistic responses from optimistic ones, with positive figures indicating net optimism.

The pick-up in manufacturing was driven overwhelmingly by the electronics sector, whose sub-index surged to plus-39 from plus-24 for the previous month.

"Demand for ‌the data-centre-related market is extremely strong," a manager ​at an electronics company said, reflecting a wave of AI-related capital spending flowing through to Japanese suppliers of chips, testing equipment and related components.

Precision machinery held firm at plus-29 and metal products edged up to plus-26 from plus-25. Textiles/paper-pulp swung to plus-13 from zero. On the other hand, steel/nonferrous metal stayed at minus-13.

In the non-manufacturing sector, real-estate/construction rose to plus-37 ​from plus-32 and transport/utilities climbed to plus-33 from plus-25. Information/communications slipped to plus-21 from ‌plus-33, while retailers ‌rebounded to ⁠plus-18 from plus-9.

"We have been able to keep raising rents," a manager at a real-estate company said, pointing to continued pricing power in the property market despite concerns over higher interest rates.

Looking three months ahead, manufacturers expect sentiment to ‌strengthen further to plus-27, ​while non-manufacturers see their index steady at ‌plus-27. Respondents flagged Middle ⁠East tensions, raw-material ​costs and softer domestic consumption as key downside risks.

(Reporting by Satoshi Sugiyama; Editing by ​Thomas Derpinghaus)

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