Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Japan’s Manufacturing Activity, Spending Fall More Than Expected

Japan’s Manufacturing Activity, Spending Fall More Than Expected

John Kicklighter, Varun Jaitly,

Talking Points:

  • Q1 Business conditions Index for large manufacturers decreased to 6 from 12 prior
  • The amount of companies that believe business conditions are not favorable increased
  • Capital expenditures decreased by 0.9% versus an expected decrease of 0.7%

See how retail traders are positioning in USDJPY and the Yen crosses using the FXCM SSI readings on DailyFX's sentiment page.

Both USD/JPY and the Nikkei 225 fell in the wake of Japan’s first quarter Tankan manufacturing and capex data disappointed against already tempered expectations. The large manufacturing and non-manufacturing measures both fell short of expectations with readings of 6 and 22 respectively (against forecasts of 8 and 24, and previous readings of 12 and 25). The outlook measures – reflecting expectations for business conditions ahead – were equally disappointing. Factory industry firms posted a reading of 3 versus both a forecast and previous measure of 7. The service sector outlook unexpectedly dropped to 17 from 18 – it was expected to grow two points.

Amid a troubled forecast for the Japanese economy, business spending (referred to as ‘all industry capital expenditures (CAPEX)’ presented a worrying -0.9% contraction in quarter compared to the previous quarter’s 10.8% growth.

Similar to the ‘large’ industry figures, the small manufacturing and non-manufacturing measures came in lower than expected as well. Outlooks for the both factory and service based industries turned pessimistic with readings of -6 and -3 respectively (versus previous readings of -4 and 1).

The negative numbers weighed on both the local capital markets with the Nikkei stumbling while the USD/JPY would follow suit. While the weak data undermines Japanese growth forecasts, the Yen crosses have shown a sensitivity to ‘risk trends’ that frequently sees a strong correlation to equities and other return-oriented assets.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.