TANKAN as a tool for
forecasting economic
condition in Japan
Satoshi Kudoh
Research and Statistics Department
Bank of Japan
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1. Outline of TANKAN Survey
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“TANKAN” is a short-term economic survey of enterprises
by Bank of Japan
To provide an accurate picture of business trends of enterprises in
Japan, and to contribute to the appropriate implementation of our
“forward-looking” monetary policy.
Diffusion Index (DI) and quantitative survey
 DI and quantitative survey include not only current but also
predicted value.
 Year-to-year comparison and revision rate of sales, profits,
fixed investment etc.
The present TANKAN which covers enterprises of all sizes (large,
medium, small) started in 1974.
Quarterly basis (in March, June, September, December).
Sample Enterprises : 10,235 (Sept. 2009 Survey)
Population Enterprises : 209,358 (based on 2004 “Establishment and
Enterprise Census of Japan”)
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2. Features of TANKAN Survey
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Combination of qualitative data and quantitative data
High Response Rate : 99.0% (Sept. 09 survey)
Long time series databases
Quick Release : at 8:50, one business day after the end of the survey period
Check of reported figures and phone interview
High Reputation
 Survey on the usefullness of economic statistics (The federation
of Economic Organizations, Nov. 2004)
Survey
Institution
Index
Survey
Institution
Index
1st
TANKAN (Business conditions)
Bank of Japan
78.2
6th
TANKAN (Fixed investment)
Bank of Japan
65.1
2nd
GDP
Cabinet Office
75.8
7th
Corporate Goods Price Index
(CGPI)
Bank of Japan
61.5
3rd
Consumer Price Index (CPI)
Ministry of Internal Affairs and
Communications
70.7
8th
Indices of Industrial Production
Ministry of Economy, Trade and
Industry
61
4th
Labor Force Survey
Ministry of Internal Affairs and
Communications
66.9
9th
Trade Survey
Ministry of Finance
59.6
5th
Indexes of Business Conditions
Cabinet Office
65.3
10th
TANKAN (Sales, Profit)
Bank of Japan
59.1
Average
38.8
・Higher indexes mean that users often use.
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DI about business conditions is well-known as an index which
provides early signals of the turning points in economic activity.
Note: Shaded areas indicate periods of recession (according to the Cabinet Office),
and the triangles on the right top corner of the charts show the recent peak, October 2007.
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3. Comparison with key economic values
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Analysis of revision rate can
be available for forecasting
some of GDP componets.
Year-to-year % changes of Private NonResidential Investment
(FY1982 - FY2008)
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- Sales, Consumption, Exports, Profits, Private Investments etc.
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Especially, revision rate of
the fixed Investment is
widely considered as
important information of
current and future economic
condition.
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TANKAN
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5
0
-20
-10
0
10
20
30
-5
-10
y = 1.0053x - 1.0431
R2 = 0.8004
-15
-20
GDP
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Revision patterns are different between large and small enterprises,
and also different by business condition.
Fixed Investment of manufacturing
Large enterprises
Small enterprises
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4. Problems and Future Issues
Improvement of response rates of
annual projection
- Response rate of predicted value
decreases in March because ...
a. more enterprises are not able to
forecast the next fiscal year,
especially in this crisis
b. more listed enterprises are
enforcing governance on compliance
c. they are reducing redundant
personnel
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Fixed Investment of manufacturing
Large enterprises
Treatment for missing value
- TANKAN adopts cold-deck imputation.
- Overestimation of sales,profits, and
fixed investment after this financial
crisis
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We are beginning to discuss some issues of TANKAN
survey ...
 Outlier detection and treatment
 Sample design
 Consolidated accounting
etc.
We will make efforts to overcome the various problems
and meet users’ need. We welcome your suggestion!
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Reference
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Web-site:
http://www.boj.or.jp/en/theme/research/stat/tk/index.htm
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Explanation (Jun. 7, 2007)
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FAQ (Mar. 2, 2007)
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Releases
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Notice of changes
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