June 2025 Tankan Survey: Overall Business Sentiment Holds Steady, but Outlook Softens

According to the Bank of Japan’s June 2025 Tankan survey, the Actual Business Conditions Diffusion Index (DI) for all enterprises and all industries remained unchanged at 15, maintaining the same level as the previous quarter. This stability indicates that overall business sentiment has held firm, supported by moderate economic activity and ongoing corporate resilience.

In contrast, the Forecast Index fell slightly from 10 to 9, suggesting that firms are turning slightly more cautious about the business outlook for the coming quarter. The divergence between the actual and forecast indices may reflect lingering uncertainties such as slowing global demand, exchange rate volatility, or geopolitical risks, which could weigh on future corporate confidence.

Japan’s Composite Consumer Confidence Index 

Japan’s Composite Consumer Confidence Index (CCI) in 2025 reflects a cautious yet gradual recovery in household sentiment. After bottoming out at 31.1 in April, the index rebounded steadily to 35.0 by September, indicating improving consumer perceptions of income stability and overall economic outlook.

From an economic standpoint, this recovery signals a renewed willingness among Japanese households to spend on discretionary activities, including overseas travel. Although confidence levels remain below pre-pandemic norms, the sustained upward trend since mid-2025 suggests growing resilience in consumer behavior.

This improvement in sentiment, coupled with a relatively stable yen and moderating inflation, provides a favorable backdrop for the recovery of Japan’s outbound tourism in the second half of 2025. Nonetheless, the pace of expansion is expected to remain moderate as consumers continue to weigh income prospects and cost-of-living pressures.