Japan's survey shows poor business outlook, BOJ likely pauses

Japan's Q2 2025 Business Outlook Survey revealed significantly negative results, prompting expectations the Bank of Japan will maintain its current monetary policy. The Large Manufacturing Conditions index for Q2 registered -4.8, a sharp decline from the previous quarter's -2.4 and far below the expected +0.8. This poor performance is expected to influence the Bank of Japan's decisions. The Bank of Japan is now anticipated to hold interest rates steady through the end of the year and may reduce its bond buying at a slower pace due to the survey's findings.