The Reuters Tankan index for Japanese manufacturers climbed to +13 in June 2026 from +8 in May, marking a second straight month of improvement as strong semiconductor demand boosted confidence among chemicals, electronics, and machinery producers. The chemicals sector index surged to +20 from +6, while firms cited booming orders tied to the chip market despite ongoing geopolitical tensions. Meanwhile, non-manufacturers’ sentiment rose to +32 from +29, supported by stronger confidence in the real estate and construction sectors and a steady pipeline of new projects. Looking ahead, manufacturers expect sentiment to remain at +13 in September, while non-manufacturers see their index easing to +19 amid concerns over geopolitical risks and supply chain challenges. The transport machinery sector, including automakers, turned notably cautious, with its outlook falling to -13 from +13, reflecting persistent material sourcing difficulties and supply chain disruptions.