The Bank of Japan's (BOJ) Tankan survey showed the country's large manufacturers are more optimistic than expected, with the index hitting its highest level since March 2014, before a sales tax hike took effect.
"It progressively shows the Japanese economy is improving. Expectations are rising. Looking at the rest of the world, Japan doesn't look that bad," Peter Boardman, managing director at Tradewinds, told CNBC. "Sentiment within Japan is quite strong."
Japan's large manufacturers' index for June came in at positive 15, compared with expectations in a Reuters poll for a positive 12. For the September figures, the index was forecast at positive 16, compared with a Reuters poll forecast for positive 12. The tankan measures corporate sentiment by subtracting the number of companies who say business conditions are negative from those that say they are positive.
The survey showed big companies expect capex for the 2015-16 fiscal year will rise 9.3 percent, compared with a Reuters poll forecast for 5.2 percent. That's the biggest rise since 2006. But small firms expect capex to fall 15.7 percent over the period, although that came in better than a Reuters poll forecast for a 16.3 percent fall.
Boardman wasn't the only one who read the data bullishly.
"You're finally seeing a deleveraging process, a very long one, for the balance sheets for a lot of even the non-financials in Japan, coming to an end, which means capital allocations back to investors [and] better earnings momentum than just about anywhere in the world," Tim Seymour, chief investment officer at Triogem Asset Management, told CNBC.