On July 15, news emerged that the Reuters Tankan survey showed Japan's manufacturing confidence remained optimistic in July, supported by robust semiconductor demand, with the Tankan manufacturing sentiment index holding steady at 13. Non-manufacturing confidence, however, declined as costs were pushed up by the Middle East conflict, a weak yen, and rising interest rates, with the Tankan non-manufacturing sentiment index falling from 32 to 25. Manufacturing firms reported that the semiconductor market (including memory-related demand) is recovering, with orders for chip applications and AI server-related products expanding rapidly, and a general increase in orders for electronic components. An executive at a precision machinery manufacturer stated that both order volumes and values have reached unprecedented levels, raising concerns about insufficient production capacity. Service sector managers noted that while there are signs of resolution to the Middle East issues, the situation has not yet returned to normal. Looking ahead, manufacturers expect confidence to remain stable, with the sentiment index for October projected to rise slightly to 14, while the non-manufacturing index is expected to stay at 25, as companies assess the impact of geopolitical risks and supply chain challenges.