Japanese Reuters Tankan Index (Aug) 18 (Prev. 13)

The Reuters Tankan, a monthly survey modelled on the Bank of Japan's quarterly Tankan and heavily weighted toward manufacturers, has historically served as an advance read on the official survey rather than a market mover in its own right. A rise in the headline diffusion index of this size is consistent with an improving mood in the export-facing industrial sector, the segment most sensitive to the yen and to external demand, and episodes of sustained improvement in this series have tended to foreshadow a firmer official Tankan print. The metals and materials tagging reflects the survey's heavy manufacturer coverage, since responses from steel, nonferrous and basic materials firms are a large share of the sample and tend to drive the swings. The distinction worth drawing is between a one-month bounce and a trend: single readings in this series have often reversed, while consecutive gains have more reliably preceded shifts in BoJ commentary. The follow-ons are the official Tankan, the direction of the yen as the swing factor for exporter sentiment, and whether the non-manufacturing component confirms the manufacturing improvement.