Japan’s Business Survey Index for large manufacturers rose to 7.6% in the third quarter of 2026 from -1.8% in Q2, far above market expectations of 2.5%. It was the fastest pace of improvement since Q4 2021, amid government efforts to boost GDP growth and stronger government spending. Looking ahead, manufacturing sentiment is expected to continue to expand, though at a softer rate, to 5.8% in Q4 and 4.9% in Q1 2027. The index, based on a survey of major manufacturers, remains a key barometer for an economy where industrial output plays a central role.