Big Japanese manufacturers reported their strongest business sentiment in nearly a decade for the quarter ending in June, according to the Bank of Japan's Tankan survey released Wednesday.
The index for large manufacturers rose to levels not seen since 2018, signaling that the corporate sector is successfully navigating the economic headwinds posed by the ongoing Middle East conflict and associated energy price volatility.
The Nikkei 225 index climbed more than 5% earlier in the week, breaking through previous resistance to set a new all-time high.
The data provides fundamental backing for the recent surge in Japanese equities.
The Nikkei 225 index climbed more than 5% earlier in the week, breaking through previous resistance to set a new all-time high.
That rally was driven by broad-based optimism and hopes for a potential ceasefire in the Middle East, which has triggered a repricing in global energy markets.
The Tankan results suggest that the equity market's bullish stance is grounded in improving corporate fundamentals rather than speculative sentiment alone.