The Tankan Small Manufacturers Index measures business conditions among small manufacturing enterprises in Japan, based on a quarterly survey of approximately 220,000 firms. The index is calculated by subtracting the percentage of negative responses from positive ones, with values above zero indicating optimism and below zero indicating pessimism. This index is used to assess the overall health and sentiment of the small manufacturing sector.
A higher than expected figure should be seen as positive (bullish) for the JPY while a lower than expected figure should be seen as negative (bearish) for the JPY.