On August 12, the Reuters Tankan survey revealed that Japan's manufacturing confidence index surged to 18 in August, marking the highest level since March 2026 and up from 13 in July. Simultaneously, the non-manufacturing confidence index also saw an uptick, rising from 25 to 28, bolstered by robust domestic consumption. Looking ahead to the next three months, market sentiment is expected to moderate somewhat. Semiconductor demand stands as the primary catalyst for the market's warming trend (Note: Here, 'warm up' is translated as 'warming' to convey the notion of increasing market activity/heat; alternatively, 'heating up' could also be used depending on the context, but 'warming' is chosen for its smoothness). Notably, significant increases in the sub-indices for chemicals and metal machinery suggest that the strong momentum of the semiconductor supply chain is permeating throughout Japan's entire industrial sector, rather than being confined to a select few chip manufacturers. The manufacturing index reaching its peak since March underscores that the impact of global trade uncertainty on chip demand-related exporters has largely dissipated. In contrast, the index for the transport equipment industry remained stagnant at 0, with the automotive sector yet to reap substantial benefits from the recovery.