The Reuters Tankan index for Japanese manufacturers fell to +10 in December 2025 from a near four-year high of +17 in November, as fiscal and growth concerns weighed on sentiment. Revised data showed that the economy contracted more than initially estimated in the third quarter. Prime Minister Sanae Takaichi’s large spending plans added to worries over Japan’s fiscal health, while expectations of a Bank of Japan rate hike this month further clouded the economic outlook. The steel and nonferrous metals sub-index dropped sharply to -33 in December from -11 in November, while the textiles, paper, and pulp sector remained flat for a second consecutive month. The monthly poll serves as a leading indicator for the BOJ’s quarterly Tankan survey.
