FX.co ★ Japan Manufacturers’ Mood Weakens in December

In December 2025, the Reuters Tankan index for Japanese manufacturers decreased to +10 from November's nearly four-year high of +17, reflecting concerns about fiscal stability and economic growth. Revised figures indicated that the economy contracted more significantly in the third quarter than initially believed. Prime Minister Sanae Takaichi's extensive spending plans heightened apprehension about Japan's fiscal health, and the anticipated Bank of Japan interest rate increase this month added further uncertainty to the economic forecast. The index for the steel and nonferrous metals sector experienced a significant decline, falling to -33 in December from -11 in November, while the textiles, paper, and pulp industry remained unchanged for the second month in a row. This monthly survey acts as a precursor to the Bank of Japan's quarterly Tankan report.