Tankan Survey

What Is the Tankan Survey?

The Tankan survey is a quarterly assessment of business conditions in Japan. The results of the survey are issued by the Central Bank of Japan and used to formulate the nation's monetary policy.

The survey is conducted among Japanese businesses. A reading greater than 0 represents favorable conditions, while a number less than 0 represents unfavorable conditions.

The Tankan survey indicated that business conditions were negative for most of the period between 1991 to 2000, a time of prolonged economic stagnation in Japan that was also known as the Lost Decade.

Key Takeaways

  • The Tankan survey serves as a key economic indicator and has an impact on Japanese monetary policy, its stock market, and its currency rate.
  • Based on a survey of Japanese businesses, the results are released quarterly.
  • The manufacturing portion of the survey is seen as a particularly important gauge of the state of Japan's economy.

Understanding the Tankan Survey

The results of the Tankan survey are a key indicator of the Japanese economy.

Thousands of Japanese companies are canvassed for the quarterly survey. According to a Bank of Japan document, companies not included in the survey are seen as having a "weak link with economic conditions," such as education and health care.

Company executives are asked about current trends and conditions in their businesses and industries and their expectations for the next quarter and year.

The survey includes four categories of questions covering current business conditions, near-term expectations, the inflation outlook, and the number of new hires made by the company.

The Tankan report is released four times a year in April, July, October, and mid-December.

Influence of the Tankan Survey

The quarterly release of the Tankan survey has a considerable impact on Japanese stock prices and on Japan's currency rate.

The portion of the Tankan survey that measures the health of the manufacturing sector is considered particularly important as a gauge of overall Japanese economic growth.

Japan’s economy is highly developed and one of the largest in the world. Japan is one of the world’s largest automobile manufacturing nations and has one of the largest electronic goods industries.

Japan is ranked among the world's most innovative countries and leads several measures of global patent filings.

The Bank of Japan

The Bank of Japan (BOJ), headquartered in the Nihonbashi business district in Tokyo, is responsible for issuing and handling currency and treasury securities, implementing economic policy, maintaining the stability of the Japanese financial system, and providing settling and clearing services.

Like most central banks, the BOJ compiles and aggregates economic data and produces economic research and analysis.

The Japanese governor, Haruhiko Kurodaank as of April 2021, is the head of the BOJ, along with two deputy governors and six executive directors. The governor, deputy governors, and executive directors belong to the bank's Policy Board, which is the Bank's decision-making body.

The Board's Role

The Board sets currency and monetary controls, the basic principles for the Bank's operations, and oversees the duties of the Bank's officers, excluding auditors, and counselors. The Policy Board includes the governor and the deputy governors, auditors, executive directors, and counselors.

The BOJ decides and implements Japanese monetary policy to maintain price stability. The Bank adjusts interest rates for currency and monetary control, using instruments such as money market operations.

The Policy Board decides monetary policy at Monetary Policy Meetings (MPMs). At these meetings, the Policy Board discusses the nation's economic and financial situation, sets the guidelines for money market operations, and sets the BOJ's monetary policy stance for the immediate future.

Example of the Tankan Survey

Tankan Survey Q1 2016-Q1 2021
Tankan Survey Q1 2016-Q1 2021.

The Tankan survey rose steadily from 2016 into 2018, as can be seen from the chart above, before turning sharply negative in 2019 and into 2020.

During the COVID-19 pandemic in the Spring of 2020, the survey registered a record low of -34.00 before bouncing back and finally regaining positive territory in the first quarter of 2021.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Bank of Japan. "Tankan Explanation." Accessed Nov. 7, 2021.

  2. Statista. "Motor Vehicle Production Volume Worldwide in 2020, By Country." Accessed April 12, 2021.

  3. Bank of Japan. "About the Bank." Accessed April 12, 2021.

  4. Bank of Japan. "Monetary Policy." Accessed April 12, 2021.

  5. YCharts. "Japan Tankan Business Conditions for Large Enterprises in Manufacturing." Accessed April 13, 2021.