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IPS173 Yuki U.
provide an accurate picture of business trends of enterprises in Japan, thereby
1
contributing to the appropriate implementation of monetary policy.
The Tankan is a geographical-based survey, using a sample survey
framework (outlined in the Appendix) where sample enterprises are selected
from a survey population whose target population is private enterprises
(excluding financial institutions) in Japan with capital of 20 million yen or more.
Of the survey population 2 comprising approximately 220,000 enterprises,
approximately 10,000 sample enterprises were chosen in accordance with
statistical accuracy. The Tankan asks various questions to measure business
activities, such as those regarding business conditions, financial statements,
and inflation, all of which are surveyed on a non-consolidated basis, collecting
answers from enterprises located in Japan.
The above framework meets the Tankan’s purpose as it measures, on a
quarterly basis, short term domestic economic conditions through the
perceived business conditions of the surveyed enterprises and their annual
projections via financial statements including exports.
However, it is difficult to capture the factors behind changes in domestic
business activities which are occurring due to expanding overseas business
activities and which are not fully covered in the existing survey items of the
Tankan. With the sales and profits of Japanese multinational enterprises being
driven by their overseas business activities, investment decisions are made
more and more on a consolidated rather than non-consolidated basis, making
it difficult to capture the background behind changes in corporate behaviour
and economic conditions in Japan. This poses challenges for the Bank in
capturing accurately and in a more timely manner, the changing administrative
decisions of firms and business trends in Japan. Section 2 shows recent
developments in the overseas business activities of enterprises in Japan and
describes how the Bank is responding to the challenges by revising survey
items and coverage. Section 3 touches on further improvements the Bank is
considering to more timely reflect changes in enterprise business trends and
section 4 gives some concluding remarks.

2. Recent developments of overseas business activities and revisions of
the Tankan
The sales of overseas affiliates of Japanese enterprises have increased over
the past decade (Chart 1). Consequently, these affiliates have increased their

1 For details, see "Explanation of the Tankan (Short-Term Economic Survey of Enterprises in
Japan)" (February 2019).
2 The survey population of the Tankan is drawn from the Economic Census conducted by the
Ministry of Internal Affairs and Communications and the Ministry of Economy, Trade and
Industry, whose enumeration unit is defined as any establishment having one location and
being operated under a single management in Japan.
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