June Tankan Business Confidence and Price Outlook

The June Tankan survey reported resilient business confidence and rising inflation expectations among Japanese firms, supporting the Bank of Japan's path toward policy normalization. Citi maintains a forecast of semiannual rate hikes aiming for a 1.5% terminal rate.

Key Takeaways

• 1.Large manufacturer business confidence DI rose to 22 from 17, exceeding market expectations.
• 2.Rising corporate input and output price expectations indicate structural inflation, supporting monetary policy normalization.
• 3.Citi maintains a view of semiannual rate hikes toward a 1.5% terminal rate, noting potential risks from yen depreciation.

Table of Contents

• CITI'S TAKE
• June Tankan: Resilient business confidence and price outlook support continued rate hikes
• Appendix A-1

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