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The Reuters Tankan index for Japanese manufacturers fell to 7.0 in April 2026, down sharply from 18.0 in March. This was the steepest monthly decline since January 2023 and the first drop in three months. The latest reading pointed to a clear deterioration in business sentiment, as rising input costs—especially for energy and raw materials—continued to squeeze profit margins. At the same time, softer external demand weighed on export-oriented industries. Adding to the gloom, persistent uncertainty over global trade conditions and currency volatility, including a weaker yen, intensified concerns about the economic outlook and led firms to adopt a more cautious stance on both production and investment plans.
