Business climate : PMIsBusiness conditions showed improvement after holding up well. The TANKAN quarterly survey for Q4 2025 reported its highest level (17, +2 points) since 2018, after four steady quarters. The business conditions for large manufacturing companies (15, +1 point) – the most sensitive to US tariffs – showed continued improvement in 2025. At the same time, the manufacturing PMI remained stable (49.0), while the services PMI declined but remained at a healthy level (52.6, -0.7 pp).
Household confidenceBetter household sentiment. Household confidence, as measured by the Cabinet Office, improved for the second consecutive quarter in Q4 2025, standing at 36.8 (+2.2 points), after being weakened by tariff fears in H1. The greater rise related to “overall livelihood” (35.5, +3.1 points), while employment exhibited the best result (41.1, +2.2 points).
