Large Japanese companies are more optimistic despite Iran conflict, but analysts say this may not last
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The positive sentiment may not fully capture the impact from the Iran war, analysts said, as Japan's Tankan survey period ended in March.
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In this article .N225 HSBC Follow your favorite stocks CREATE FREE ACCOUNT The Shibuya pedestrian intersection in Tokyo, Japan. Marco Bottigelli | Moment | Getty Images Large Japanese manufacturers indicated their highest level of business optimism in over four years, despite uncertainties brought about from the Iran war. That's according to the Bank of Japan's quarterly Tankan survey , a closely-watched poll that measures business sentiment among domestic companies. The index for business optimism among large Japanese manufacturers increased to 17 for the first quarter of 2026, up from 15 in the previous quarter — per the survey results published April 1 — and against the 16 expected by economists polled by Reuters. A positive figure on the Tankan indicates that optimists outnumber pessimists, and vice versa. The figure was at its highest since the fourth quarter of 2021, according to LSEG data. This was helped by "solid profits" offsetting pressures from higher energy costs, according to Carlos Casanova, senior economist for Asia at Swiss private bank UBP in an email to CNBC. Large non-manufacturers' business sentiment stood at 36, holding at a multi-decade high as per LSEG data, and same as last quarter's revised 36 . That also defied Reuters poll expectations of 33. The Nikkei 225 gained 4.48% on Wednesday after the data release, fuelled by hopes that the Iran war could end soon. In comments to CNBC, Frederic Neumann, chief Asia economist at HSBC , said that the uptick in business sentiment was also due to Japan's economy seeing accelerating momentum at the start of the year, supported by strong exports in January and February. However, the positive sentiment may not fully capture the impact from the Iran war, as the survey period ended in March. "While the survey signals strong momentum going into the conflict, the outlook for activity in the coming months is increasingly murky, with every day and week that the Strait of Hormuz remains closed compounding the ch...
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