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Explanation of the Short-Term Economic Survey of Enterprises in Japan (Tankan)

May 2011
Bank of Japan
Research and Statistics Department

Site map of the Tankan

Name Content Site Release timing
Result of each Survey
  Tankan Outline Main figures of 'Tankan Summary' Statistics
(Japanese/English)
8:50 am on the release day
Tankan Summary Main figures of the survey results Statistics
(PDF, MS-Excel files)
(Japanese/English)
8:50 am on the release day
Tankan Figures by Industry Main figures by industries Statistics
(MS-Excel files)
(Japanese & English)
8:50 am on the following day of release
Tankan: The Comprehensive Data Set Detailed release data Statistics
(MS-Excel files)
(Japanese & English)
8:50 am on the following day of release
Reference Data on "Conditions for CP Issuance" Reference Data on "Conditions for CP Issuance" Statistics
(PDF)
(Japanese/English)
8:50 am of two business days later of release day
Long-term time series data Detailed long-term time series data BOJ Time-Series Data Search
(Japanese/English)
8:50 am on the following day of release
Framework
  Sample form Sample form of Tankan Statistics
(Japanese/English)
--
General Explanation Purpose, coverage, and survey items etc. See below. --
Sample Design and Sample Maintenance of Tankan The explanation of the sample design and sample maintenance of Tankan. (June 2004) Statistics
(Japanese/English)
--

Index

Explanation of the Short-Term Economic Survey of Enterprises in Japan (Tankan)

1. Purpose of survey

The Tankan is a statistical survey by the Bank of Japan in accordance with the Statistics Law (Law No. 53 of 2007). The survey is conducted to provide an accurate picture of business trends of enterprises in Japan, thereby contributing to the appropriate implementation of monetary policy.

2. Survey method

The answer sheet is returned by mail or online. The Bank of Japan is obliged to keep confidential information obtained from respondents under strict security control in accordance with the Statistics Law.

3. Frequency of survey

The survey is conducted quarterly in March, June, September, and December. The survey results are released at the beginning of April, July, October, and mid-December in principle (released at 8:50 a.m. Japan Standard Time). The release dates for the next one year are announced in advance at the end of June and December.

4. Coverage

(1) Tankan

The population of the survey is approximately 210 thousand private enterprises (excluding financial institutions) in Japan with at least 20 million yen in capital, based on the Ministry of Internal Affairs and Communications' "Establishment and Enterprise Census of Japan" (conducted in October 2006).
Sample enterprises are selected from the population by industry and size classification as shown below, under certain statistical criteria that have been set to statistical accuracy and other measuring instruments.

  1. (a) The error ratios of the population estimates in sales of the sample enterprises are within the target range (3 percent for the manufacturing sector and 5 percent for the nonmanufacturing sector).
  2. (b) The distribution of sample enterprises measured by the size of capital and the number of regular employees is consistent with the distribution of population enterprises.
    etc.

Sample enterprises are reviewed when the "Establishment and Enterprise Census of Japan" is conducted. We have changed the number of sample enterprises in March 2010 (number of sample enterprises was 11,528 as of the March 2010 survey).

Reference: The number of sample enterprises as of the March 2010 survey.

Reference: The number of sample enterprises as of the March 2007 survey

In principle, sample enterprises are fixed until the next revision. However, the statistical accuracy may decline due to decrease in the number of sample enterprises caused by mergers, spin-offs, and other corporate activities. Therefore statistical examination is conducted annually, and when the statistical accuracy actually declines, new sample enterprises are added.

Industry classification:

Manufacturing is divided into 17 categories and nonmanufacturing into 14 categories, following the "Japan Standard Industrial Classification" released by the Ministry of Internal Affairs and Communications.

Following the revision of the "Japan Standard Industrial Classification" released in November 2007, some industry classifications will be revised from the March 2010 survey (For details of the revision of the industry classification, refer to "Revision of the Industry classification of the Short-term Economic Survey of Enterprises in Japan (TANKAN survey)"<June 30, 2008, Research and Statistics Department Bank of Japan>).

Industry classification

Size classification:

Based on the size of capital, enterprises are categorized into large enterprises (capital with 1 billion yen and more), medium-sized enterprises (capital with 100 million yen to less than 1 billion yen), and small enterprises (capital with 20 million yen to less than 100 million yen).

From the March 2004 survey, the data is switched from "regular employees" basis (categorized into large, medium-sized, and small enterprises according to the number of regular employees) to "capital" basis.

Aggregates are released by industry and size classification (total of 93 strata: 31 industries <17 in manufacturing, 14 in nonmanufacturing> divided into three scales <large, medium-sized, and small enterprises>). The strata are further segmented (total of 397 strata) by the size of capital and the number of employees for selecting sample enterprises and calculating the population estimates in order to enhance the statistical accuracy with less burden on respondents and less staff members when compiling data.

(2) Financial institutions

Financial institutions are also surveyed in order to supplement the Tankan.

From the March 2004 survey, the survey on financial institutions has been changed to a sample survey, and the coverage and survey items have been expanded.

Population enterprises (735 enterprises) are comprised of those belonging to the following seven sectors: (1) city banks and trust banks1; (2) member banks of the Regional/ Second Regional Banks Association of Japan; (3) shinkin banks; (4) other financial institutions for small businesses; (5) Financial products transaction dealers; (6) insurance companies; and (7) non-deposit money corporations2.

Sample enterprises are selected from the population3 by sector and size classification according to the amount of total assets (18 strata), under certain statistical criteria that have been set to target accuracy and other measuring instruments as explained below4:

  1. (a) The error ratios of population estimates in fixed investment based on the sample enterprises are within the target range (10 percent for all financial institution sectors).
  2. (b) The distribution of sample enterprises measured by the size of total assets does not diverge from the distribution of population enterprises.

Sample enterprises are reviewed (adding and excluding sample enterprises) in line with the revision of theTankan (208 sample enterprises after the revision in 2010).

In principle, sample enterprises are fixed until the next revision. However, as with the Tankan, statistical examination is conducted annually and when the statistical accuracy actually declines, new sample enterprises are added.

  1. Includes (1) domestic and foreign trust banks which started operations since October 1993, and (2) new-type banks which specialize in financial intermediation using websites and ATMs and do not belong to traditional banking sectors.
  2. Comes under the classification of "Non-Deposit Money Corporations, Including Lending and Credit Card Business" from the "Japan Standard Industrial Classification". Of those listed or over-the counter institutions are the population enterprises of the Tankan.
  3. Following the revision of the "Japan Standard Industrial Classification" released in November 2007, some financial institutions also will be revised from the March 2010 survey (For details of the revision of the industry classification, refer to "Revision of the Industry classification of the Short-term Economic Survey of Enterprises in Japan (TANKAN survey)"<June 30, 2008, Research and Statistics Department Bank of Japan>.
  4. A complete survey is conducted on "city banks" and "trust banks (excludes domestic and foreign trust banks which started operations since October 1993)."

5. Survey items

Survey items consist of four groups: (1) "Judgement Survey;" (2) "Annual Projections;" (3) "Quarterly Data;" and (4) "Number of New Graduates Hired (surveyed only in June and December)." They are all surveyed on a non-consolidated basis.

(1) Judgement Survey

For the following ten items, responding enterprises are asked to choose one alternative among three as the best descriptor of prevailing conditions, excluding seasonal factors at the time of the survey and three months hence. The alternatives for each item are shown in brackets.

Business Conditions: Judgement of general business conditions of the responding enterprise, primarily in light of individual profits.
[1) Favorable. 2) Not so favorable. 3) Unfavorable.]

Domestic Supply and Demand Conditions for Products and Services: Judgement of domestic supply and demand conditions for major products and services in the industry of the responding enterprise. Judgement in light of movements of goods, customers, and order arrival are included. Judgement including overseas conditions is also acceptable when it is difficult to exclude them.
[1) Excess demand. 2) Almost balanced. 3) Excess supply.]

Overseas Supply and Demand Conditions for Products: Judgement of overseas supply and demand conditions for major products in the industry of the responding enterprise.
[1) Excess demand. 2) Almost balanced. 3) Excess supply.]

Inventory Level of Finished Goods and Merchandise: Judgement of excessiveness, adequacy, or shortage of the inventory level of finished goods and merchandise compared with sales of the responding enterprise. Judgement requested only for "at the time of the survey."
[1) Excessive or somewhat excessive. 2) Adequate. 3) Insufficient or somewhat insufficient.]

Wholesalers' Inventory Level: Judgement of excessiveness, adequacy, or shortage of domestic and foreign wholesalers' inventory levels for major finished goods and merchandise in the industry of the responding enterprise. Judgement requested only for "at the time of the survey."
[1) Excessive or somewhat excessive. 2) Adequate. 3) Insufficient or somewhat insufficient.]

Production Capacity: Judgement of excessiveness, adequacy, or shortage of production capacity or business equipments of the responding enterprise, excluding a shortage caused by temporary conditions such as a closure of a factory due to regular repairs.
[1) Excessive capacity. 2) Adequate. 3) Insufficient capacity.]

Employment Conditions: Judgement of excessiveness, adequacy, or shortage of the number of employees at the responding enterprise.
[1) Excessive employment. 2) Adequate. 3) Insufficient employment.]

Financial Position: Judgement of the general cash position of the responding enterprise, on account of the level of cash and cash equivalent, lending attitude of financial institutions, and payment and repayment terms. Judgement requested only for "at the time of the survey."
[1) Easy. 2) Not so tight. 3) Tight.]

Lending Attitude of Financial institutions: Judgement of financial institutions' attitude towards lending as perceived by the responding enterprise. Judgement requested only for "at the time of the survey".
[1) Accommodative. 2) Not so severe. 3) Severe.]

Conditions for CP Issuance: Judgement of the overall issuing conditions of commercial paper issuance. Judgement requested only for "at the time of the survey."
[1) Easy. 2) Not so severe. 3) Severe.]

For the following three items, responding enterprises are asked to choose one alternative among three ([1) Rise. 2) Unchanged. 3) Fall]) as the best descriptor of prevailing changes from three months earlier and three months hence, excluding seasonal factors.

Change in Interest Rate on Loans: Judgement of changes in the interest rate on borrowings of the responding enterprise.
[1) Rise. 2) Unchanged. 3) Fall.]

Change in Output Prices: Judgement of changes in the yen-based selling prices of major products and services provided by the responding enterprise.
[1) Rise. 2) Unchanged. 3) Fall.]

Change in Input Prices: Judgement of changes in the yen-based purchasing prices of main raw materials, processing fees for subcontractors, and/or prices of main purchasing merchandise paid by the responding enterprise.
[1) Rise. 2) Unchanged. 3) Fall.]

(2) Annual Projections

Responding enterprises are asked to provide semiannual and annual results and forecasts in million yen (in yen per dollar for predicted exchange rates) for the following 14 items.

Sales: Total of "Sales," "Business Income," etc. listed on the income statement.

Exports: Includes both direct exports and exports via trading houses, but excludes tripartite trade such as exports from a foreign country to another foreign country.

Wholesaling: Includes direct exports, but excludes both exports via trading houses and tripartite trade such as exports from a foreign country to another foreign country.

Exchange Rates for Exports: The average rate during the period for actual results and the expected rate assumed in the individual export plans.

Material Costs: For manufacturing, the total amount of material costs (costs of raw materials, purchased parts, and fuel etc.) and processing fees for subcontractors, among manufacturing costs. For nonmanufacturing, definitions are as below. This item excludes figures obtained through the valuation of decreased profitability of assets.

Construction: Total amount of material costs and fees for subcontractors.

Transport & Postal activities, Electric and gas utilities: Fuel costs.

Personnel Expenses: Total amount of (1) labor costs, (2) executive compensation, executive bonuses, (3) employee salaries and allowances, (4) welfare expenses, reserves for retirement benefits and bonus payments, and (5) amount of expenses with the granting of stock options. Excludes payments to temporary staffing agencies and fees for labor subcontractors in construction.

Depreciation Expenses: Total amount of deprecation expenses of tangible fixed assets and those of software assets among intangible assets.

Operating Profits: Operating profits listed on the income statement.

Financial Income: Total amount of interest and discounts received (the declared amount of gain on sales of bills as a result of discount), interest on securities, and dividends received, among non-operating income. Excludes valuation profits and profits on securities sold, and exchange profits.

Financial Expenses: Total amount of interest and discounts paid (the declared amount of loss on sales of bills as a result of discount), interest on corporate bonds etc. among non-operating expenses. Excludes valuation loss and loss on securities sold, and exchange loss.

Current Profits: Current profits listed on the income statement.

Net Income: Net income after tax deduction on the income statement.

Fixed Investment: The amount of newly listed tangible fixed assets, (including new land purchasing expenses and lease assets). Excludes transfers from other accounts to tangible fixed assets and increases in tangible fixed assets due to mergers.

Land Purchasing Expenses: The amount of new land purchasing expenses (including land developing and preparing) among the above "Fixed Investment." This does not include real estate for sale or sale in lots.

Software Investment: The amount of newly listed intangible fixed assets (including lease assets) among the software investment. Excludes software listed as expenses when obtaining.

(3) Quarterly Data

Responding enterprises are asked to provide quarter-end results in million yen (by the number of employees and part-time workers) for the following ten items.

Total Liabilities: Total liabilities on the balance sheet. The same evaluation basis as the account term is requested, whether or not the quarter-end survey falls on the account term.

Loans from Financial institutions: Total balance of borrowings, overdrafts and bills discounted from financial institutions, including government financial institutions, agriculture, forestry and fisheries financial institutions, life and non-life insurance companies. Excludes loans from other institutions (business credit).

Commercial Paper: Issue balance of commercial paper (on the balance sheet).

Corporate Bonds: Outstanding balance of corporate straight, convertible, and warrant bonds (on the balance sheet).

Total Assets: Total assets on the balance sheet. The same evaluation basis as the account term is requested, whether or not the quarter-end survey falls on the account term.

Cash and Deposits: Total balance of cash, cash equivalents, and deposits.

Securities Listed as Liquid Assets: Total balance of marketable securities on the balance sheet. The same evaluation basis as the account term is requested, whether or not the quarter-end survey falls on the account term.

Securities Listed as Fixed Assets: Total balance of securities investment on the balance sheet excluding securities of affiliates. The same evaluation basis as the account term is requested, whether or not the quarter-end survey falls on the account term.

Number of Employees: Total number of workers employed by an enterprise under one of the following labor contracts: (1) unspecified employment period; (2) specified employment period of more than one month; (3) daily employment or specified employment period of one month or less, but eighteen or more days in each of the previous two months. Workers affiliated with temporary-employment services are not included. Others included: (4) among executives, those receiving payments like that of general wage and salary workers other than directors' remuneration; and (5) among family workers of employers, those working full-time at the establishment and receiving payments like that of other wage and salary workers.

Part-time Workers: Of the workers in the above "Number of Employees," the total number of workers whose contracted daily labor hours or weekly labor days are less than those of regular employees (number of workers prior to converting working hours to eight-hour labor).

To supplement the quarterly data, responding enterprises are asked to choose one alternative among three ([1) Increase. 2) Unchanged. and 3) Decrease]) as the best descriptor of prevailing changes three months hence.

Interest-bearing Debt Outstanding: Judgement of future changes in the total balance of "Loans from Financial institutions," "Commercial Paper," and "Corporate Bonds." If the quarter-end results and the forecast (for three months ahead) of the "Interest-bearing Debt Outstanding" are zero yen, reporting enterprises are asked to choose "2) Unchanged" (for their answer).

Level of Liquidity: Judgement of future changes in the total balance of "Cash and Deposits" and "Securities Listed as Liquid Assets." If the quarter-end results and the forecast (for three months ahead) of the Liquidity outstanding are zero yen, reporting enterprises are asked to choose "2) Unchanged" (for their answer).

Number of Employees: Judgement of future changes in "Number of Employees."

(4) Number of New Graduates Hired (surveyed only in June and December)

Responding enterprises are asked to provide annual results and forecasts by person.

Number of New Graduates Hired: The number of new graduates (considered as "new graduates" by each company) hired during the past fiscal year, and the number planned to be hired during the current/next fiscal year.

Financial institutions are surveyed only for the following items:

  1. (a) "Business Conditions," "Business Equipments," and "Employment Conditions" among "Judgement Survey."
  2. (b) "Fixed Investment," "Land Purchasing Expenses," and "Software Investment" among "Annual Projections."
  3. (c) "Number of Employees" and "Part-time Workers" among "Quarterly Data."
  4. (d) "Number of New Graduates Hired."

6. Calculation methods

(1) Judgement Survey (includes "Forecast Judgements" of Quarterly Data)

Responses are aggregated into Diffusion Index (DI) as follows:

DI (percent points)
= Percentage share of enterprises responding Choice one minus Percentage share of enterprises responding Choice three.

For example, "Business Conditions DI" is calculated by subtracting the percentage share of enterprises responding "(3) Unfavorable" from that of "(1) Favorable."

(2) Quantitative Data (Annual Projections, Quarterly Data, and Number of New Graduates Hired)

The amount of "population estimates" is calculated by industry and size classifications as below. Year-to-year percent changes and revision rates are also calculated from the amount of population estimates.

Amount of population estimates
= simple aggregates / number of responding enterprises

* number of population enterprises

1. Missing Value Imputation or 2. Treatment of Outliers, both of which are statistical methods, are applied to numerical items.

  1. Missing Value Imputation
    When annual projections of the surveyed enterprise are unanswered, the most recent responses of the enterprise are substituted instead for those unanswered questions upon aggregation.
  2. Treatment of Outliers
    With respect to "Sales," "Current Profits," "Net Income," "Fixed Investment," and "Software Investment," if the values reported from sample enterprises are subject to outliers, the values are treated as a missing value. (For more specific information, please refer to "Treatment of Outliers" in the linked Appendix.)

7. Release method

As for the judgement survey and quantitative data, aggregates by industry and size classifications are released (DI, year-to-year percent change, revision rate, and actual amount of the population estimate, etc.).

The aggregated results of financial institutions are released through the following five classifications.

  1. (a) Banks = city banks, and trust banks + member banks of the Regional/Second Regional Banks Association of Japan
  2. (b) Shinkin banks and other financial institutions for small businesses =shinkin banks + other financial institutions for small businesses
  3. (c) Financial products transaction dealers
  4. (d) Insurance companies
  5. (e) Non-deposit money corporations

When already released data need correction, the corrected data, in principle, will be compiled and released as quickly as possible. However, the data may not be corrected in cases when responding enterprises revise their figures after the release.

8. Others

Apart from the Tankan (released by the Research and Statistics Department at the main office), branches of the Bank of Japan also aggregate and release the "Local Branch Tankan (only in Japanese)" (survey results of enterprises within the region covered by branches. Released materials are available on the websites of branches).

There are two main differences between the Tankan and the "Local Branch Tankan":

  1. (a) In order to reflect the industrial structure of each region, respondents of the "Local Branch Tankan" include local branches of major enterprises, etc., which are not included in the Tankan.
  2. (b) On aggregation, while population estimates are calculated for the quantitative data of the Tankan, simple aggregates are calculated for those of the "Local Branch Tankan."

The Tankan has discontinuity in data at points shown below, due to 1) the March 2004 revision and 2) the changes of the treatment of Fixed Investment and Software investment in September 2010 survey.(See "Revision of TANKAN in the March 2004 Survey -- Comparison between the pre- and post-revision in the December 2003 Survey" issued on March 2004, and "Notice for the Tankan" issued on July 2010)

1) March 2004 revision

  • Judgement Survey : before December 2003 and since March 2004
  • Annual Projection : before fiscal year 2002 and since fiscal year 2003
  • Quarterly Data : before September 2003 and since December 2003

2) Changes of the treatment of Fixed Investment and Software Investment

  • Annual Projection : before the June 2010 survey and since the September 2010 survey