On July 3rd, Teikoku Databank (TDB) released the results of its survey and compilation of domestic economic trends for June 2025, covering 26,237 companies nationwide.
<Business DI Trends in June 2025>
According to the report, the business confidence index (DI) for October 2025 rose by 0.5 points from the previous month to 43.3, marking the fifth consecutive month of improvement.
Despite lingering uncertainties regarding U.S. tariff policy, the domestic economy continued its upward trend, driven by a surge in demand from upstream to downstream industries due to the intense heatwave, as well as nationwide construction demand.
In August, record-breaking heat created a surge in demand for food and beverage-related products, heatstroke prevention goods, and air conditioners, which spread to a wide range of industries. Financial markets were buoyant, with the Nikkei Stock Average reaching a new all-time high. Construction demand remained strong with continued orders for public works, and the travel sector also benefited. On the other hand, the turmoil following the US-Japan agreement on Trump's tariffs created headwinds for external demand, and the slump in outdoor leisure and delays in passing on price increases also weighed on the economy.
The domestic economy is expected to remain relatively flat for the time being, while the future direction of real wages will be closely monitored.
<Industry-specific Business Conditions Index (DI)>
By industry, nine sectors, including manufacturing, construction, and retail, showed improvement, while only the service sector worsened.
The food and beverage industry saw widespread improvements from upstream to downstream, partly due to the bustling activity during the Obon holiday period. Seasonal demand and construction demand across the country also boosted the economy. In addition, the transportation sector secured a certain level of demand for both freight and passenger transport.
On the other hand, difficulties in securing personnel, a shortage of engineers, and the inability to pass on price increases to customers were negative factors.
In the "Transportation and Warehousing" sector, the figure rose to 43.9, a 1.0-point increase from the previous month, marking the second consecutive month of growth. Some respondents commented that "foreign trade containers handled at Hakata Port are performing well in both exports and imports" (Collection and Delivery Transportation) and "Exports of manufacturing equipment to China and exports and imports of automobile-related goods are showing a slight recovery" (Coastal Freight Shipping). However, others mentioned the impact of Trump's tariffs, such as "In areas with a concentration of automobile industries, production continues to be reduced due to the effects of Trump's tariffs" (General Warehousing).
