The Reuters Tankan manufacturing index edged up to +7 in July from +6 in June, with sentiment expected to improve further to +8 by October amid a recovery in semiconductors.

• The non-manufacturing index held steady at +30 for the third straight month but is seen softening to +27 in the coming three months.
• Electronics machinery sentiment improved to -4 in July from -16 in June, while chemicals rose to +18 from +12.
• Transport machinery sentiment fell sharply to +9 from +20, as firms cited the impact of new U.S. auto tariffs.
• Service sector outlook was mixed, with retail and IT weaker but wholesale sentiment improving.
• Firms noted rising uncertainty from U.S. trade policy and cautious investment appetite due to global headwinds.
• Japan’s export-driven economy contracted in Q1 and saw a YoY export decline in May, raising recession fears.