The Reuters Tankan index for Japanese manufacturers rose for a second consecutive month to +21 in September 2026 from +18 in August, its highest level since December 2021 and up from +7 in April. Electronics sentiment surged to +39 from +24 amid strong semiconductor and data-centre-related demand linked to AI capital spending. Non-manufacturers’ sentiment edged up to +29 from +28. Japanese equities recovered on Wednesday, with the Nikkei 225 rising 0.6% to above 65,600 and the Topix gaining 0.4% to 4,066 as technology stocks advanced. Rising oil prices sustained inflation concerns and expectations for higher interest rates, while the yen reached its strongest level in nearly seven months. Manufacturers expect sentiment to reach +27 over the next three months; non-manufacturers expect +27. Respondents cited Middle East tensions, raw-material costs and weaker domestic consumption as key risks.