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Electronics makers led the improvement in November, while confidence among non-manufacturers reached its highest level since June 2018.
Confidence among Japanese manufacturers strengthened in November, with a monthly survey's sentiment index reaching plus-27, compared with October's plus-22. Strong semiconductor demand supported the improvement, and electronics companies led the gains.
The electronics sector's reading climbed to plus-39 from plus-25. An electronics machinery company manager cited particularly strong demand for memory semiconductors. Precision machinery, which includes some manufacturers of chip-related equipment, registered plus-42, up from plus-38.
Gains extended beyond chip-related businesses. The reading for oil refinery and ceramics increased to plus-25 from plus-14, while chemicals reached plus-33, compared with plus-27 previously.
Among non-manufacturers, the overall index advanced to plus-35 from plus-23, its strongest reading since June 2018. Information and communications rose to plus-29 from plus-8 as orders strengthened. Services and others recorded plus-43, up from plus-19, with one manager citing persistent labor shortages and strong demand for talent.
For February, manufacturers expected a reading of plus-28, while non-manufacturers anticipated plus-29. The survey also found that higher prices and interest rates were weighing on both groups, with some businesses having difficulty passing increased costs to customers.
The poll ran between October 27 and November 6, drawing replies from 214 of 508 companies. It serves as an early indicator for the Bank of Japan's quarterly Tankan survey. Each index subtracts the share of pessimistic responses from the optimistic share, so a positive reading signals net optimism.