Bank of Japan (BoJ) Tankan Small Manufacturing Index

BoJ Tankan Small Manufacturing Index shows how small industrial companies in Japan estimate the pace of economic growth and business environment in the given period. Tankan is a statistical survey conducted by Bank of Japan based on statistical methods, and aims to accurately understand the company's trends across the country and contribute to the proper management of monetary policy. 99.7 percent of Japanese companies are small and medium-sized companies, but in Japan manufacturing industries, there is a subcontract structure by large companies.

It is implemented quarterly for approximately 10,000 companies across the country.

The Tankan investigates items throughout the company's activities, including the actual and predicted values of business plans such as corporate business conditions, economic environment, sales, revenues, and capital expenditures.

The index is based on the surveys of representatives of approximately 10,000 companies across the country. Representatives of Japanese companies tend to be older people due to the seniority system. Therefore, in the case of surveys, they tend to express a conservative opinion. The questionnaire contains questions about business conditions, supply and demand, inventories, production volumes, employment, profits, etc. Respondents can choose from three alternatives, Favorable, Not so favorable, Unfavorable.