Japan Economy in Jan.-March: Ideas Later.

Japan's economy expands 1.8% in Jan.-March, revised down

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TOKYO (Kyodo) -- Japan's economy expanded an annualized real 1.8 percent in the January-March quarter, revised down from an initially reported increase of 2.1 percent as capital investment slowed, government data showed Monday.

It marked the second consecutive quarter of growth, but many economists believe the prolonged Iran war will likely weigh on the Japanese economy in the April-June quarter by fueling inflation, weakening private spending and disrupting supplies of petroleum products.

Real gross domestic product, adjusted for inflation, grew 0.45 percent from the October-December period, down from a preliminary reading of 0.51 percent, a Cabinet Office official said.

GDP is the total value of goods and services produced in a country.

In the latest GDP data, capital spending fell 0.7 percent in the three months through March, revised down from a 0.3 percent increase, as investment in software and production machinery was weak.

A Cabinet Office official said the downward revision reflects separate government data on business investment by Japanese companies in the quarter, adding the impact of the Middle East conflict on the data was unclear.

Public investment was upgraded to a 1.5 percent rise from a 1.4 percent increase.

Private consumption, which accounts for more than half of GDP, grew 0.35 percent in the quarter, revised up from the preliminary 0.27 percent, helped by robust outlays for dining and spending on games, the official said.

Housing investment was revised upward to a 0.9 percent rise from the 0.5 percent increase reported earlier.

Exports rose 1.8 percent from the previous quarter, revised up from a 1.7 percent climb, supported by a recovery in auto shipments bound for the U.S. market. Imports were downgraded to a 0.4 percent increase from a 0.5 percent rise.

GDP was pressured 0.1 percentage point by a reduction in private inventories, apparently due to the government's decision to release oil from stockpiles, starting with those held by the private sector.

"Growth in the April-June quarter is forecast to hover around zero," said Yoshiki Shinke, senior executive economist at Daiichi Life Research Institute Co., noting the biggest concern is the adverse impact of supply uncertainty and procurement difficulties amid tensions in the Middle East.

The conflict has disrupted the supply of oil and petroleum products to the resource-poor country amid the effective closure of the Strait of Hormuz after the United States and Israel launched attacks on Iran on Feb. 28.

Prolonged tensions could hit Japan's exports bound for the Middle East, while concerns are heightening that elevated crude oil prices would drive up inflation.

To brace for the impact of rising energy costs, Japan's parliament on Friday enacted a 3.11 trillion yen ($19 billion) supplementary budget for this fiscal year that marks the government's first fiscal spending package in response to the Middle East crisis.

Nominal GDP expanded at an annualized rate of 2.5 percent, revised down from a 3.4 percent gain reported earlier.

Article source:   https://mainichi.jp/english/articles/20260608/p2g/00m/0bu/008000c

Japan April Current Account: Updated June 9, 2026.

Japan April current account surplus at 3.91 tril. yen on overseas returns

Ideas

International trade is very important for Japan has Japan is a major export nation and relies heavily on its exports or even it overseas investments to increase it current account.

A country's current account is like a country's Bank account as it is monitored very closely and for the most part, a country's budget is somewhat determined by it current account but not always.

It should be remembered that Japan has had a weak currency for a long time, which means it can get more income from its overseas investments and exports as it helps to increase the current account. 

Japan, it seems, doesn't have a lot of economic drivers to help grow its economy or even sustain its economy as it seems to depend on only a few things such as exports and overseas investments. 

While this might be good when the global economy is good, if the global economy goes astray and exports and overseas investments begin to fade, Japan doesn't seem to have any other real drivers to depend on as its domestic economy is, for the most part, not as strong as its export base.

Most likely, not only Japan, but most economies globally have seen decreases in exports to the Middle Eat along with a decrease in travelers that part of the world.

Unfortunately, as the situation continues on, there could be less exports and less travel to that region for a long time, and even more less imports to Japan such as energy or oil from the region too.

Yes, it might be somewhat difficult, at this time, to see the full impact just yet, as sometimes trade stats are not easy to see or not coming in correctly on time, so its hard to get the full picture of what's going on.

Sometimes, companies and even countries, with very sophisticated global supply chains today, can find ways to overcome supply chain disruptions which might be happening right now as there might be other products or services can be substituted for those in the Middle East that are not making it through the normal supply chain distribution system.

Japan's overseas investments are very important to its current account as they help to bring in needed funds which help fuel Japan's many supplementary budgets that it seems to do every few months which props up its economy, giving subsidies to Japanese households for higher than normal energy or gas prices. 

And its goods trade is equally important as again, Japan's economy, since 1945, has been heavily focused on exports and at one time, in the 1980's, Japan might have been considered the global leader in goods trade as it was producing many of the world leasing products during that period.

Japan like South Korea, which actually learned from Japan how to develop its export base, has for the most part, again, developed it economy around exports and not so much its domestic economy, which in itself is huge but doesn't grow that much.

And again, Japan and both South Korea seem to depend on just a few economic drivers to grow their respective economies. Japan, it seems, depends on its car industry to fuel its global exports, while South Korea, it seems, depends on Samsung and its semiconductor exports to grow its economy.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260608/p2g/00m/0bu/009000c

Japan Bankruptcies in May: Updated June 8, 2026

Japan bankruptcies in May down 8.9% from previous year.

Ideas

Banks in Japan, for the most part, have always been very human centric, meaning they don't just look at the bottom line but they look at the big picture, for the company and for society, compared to some or many banks in the US that just see the bottom and line and not the human side of business.

At the same time, unfortunately, in a market economy, there are always going to be those who can overcome difficult situations, and even with help, some are just not going to make it, as its just part of how a market economy works.

Not to be negative or downplay what happens, there might be a sizable number of Japanese companies that might be considered zombie companies, meaning they are just existing and not able to really do anything productive or doing anything to really help themselves.

Some or many companies, who are being adversely affected by soaring prices are probably small and mid-size companies and some of them could be suppliers to large companies and its quite possible that the large companies might be refusing the idea that small supplier type companies want to pass-on their increased costs to the next in their supply chain, which in this case involves the larger company.

And then there is the idea of companies with very thin profits margins just can't increase the wages that their employees want or need and can't increase wages to try and attract to news, and as result, unfortunately, some might choose to shut down or exit the market.

This is where Japanese banks can be even more human centric and find ways way to help the companies that deserve to be saved while understanding that not all companies should be saved as the market, for the most part, should also determine which companies survive and which need to exit the market.

A market economy is always going to have companies that enter a market and those that exist a market and those that are innovative then there are those, which just can't seem to make it no matter what they try.

Service type companies are usually the easiest to enter in a market but require a lot of time and sometimes the costs are just too high for many as in the case of restaurants, raw material costs might be out of control and restaurants can't keep increasing prices and they know they will loose many of their customers over time.

And then there is the ideas of labor costs, as again, as Japan is in a so-called labor shortage, it means workers in Japan, for the most part, have a choice and again means they can look for a company that can pay higher wages compared to those that can't.

As a result, those whose profit margins are just too thin can't afford to increase wages, probably due to increase in raw material costs, which means they have to keep wages low or they will not make a profit and it becomes very cyclical meaning a company just can't get past the constant high prices and the constant need to increase wages to keep employees.

Small and mid-size companies,, it seems are always the ones that go out of business as SMEs, and it is estimated make up 99 percent of all companies in Japans, so it not a surprise that some or many small companies have to exit the market.

Again, while Japanese banks are much more human centric than US banks there comes a time when maybe even the banks can't help some companies and those companies eventually need to exit the market.

Unfortunately, it must be remembered there is the human side of bankruptcies as families are being adversely affected and this is where a bank or other agencies can try to step in and provide assistance to the families being affected by the bankruptcies as sometimes it can be very devastating to those involved.

Have a nice day! 

Article source:  https://mainichi.jp/english/articles/20260608/p2g/00m/0bu/024000c

OECD Korea Growth Estimate: Ideas Later.

OECD lifts Korea's 2026 growth forecast from 1.7% to 2.6% amid semiconductor surge

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Containers for export are stacked at Pyeongtaek Port in Gyeonggi Province, May 8. Yonhap

The OECD significantly upgraded its growth outlook for the Korean economy this year, raising the forecast to 2.6 percent from 1.7 percent on expectations that booming semiconductor exports will outweigh risks stemming from the Middle East conflict, according to the Ministry of Finance and Economy, Wednesday.

The ministry said Korea recorded the largest upward revision among G20 economies in the OECD’s latest projections.

After lowering Korea’s growth outlook to 1.7 percent from 2.1 percent in its March report over concerns about the Middle East conflict, the OECD has now reversed course with a substantially more optimistic assessment.

The sharp upward revision appears to reflect Korea’s stronger-than-anticipated economic performance in the first quarter. According to preliminary data released by the Bank of Korea (BOK), real gross domestic product (GDP) expanded 1.7 percent from the previous quarter.

The OECD’s new forecast is in line with the BOK’s latest projection announced last month and stands slightly above the Korea Development Institute’s 2.5 percent estimate. It remains below the Korea Institute of Finance’s 2.8 percent outlook.

Pointing to semiconductors as the key growth driver, the OECD said Korea has seen a sharp rise in exports since the start of the year, with both export prices and shipment volumes posting solid gains.

The organization also forecast continued strength in private investment, led by semiconductor-related spending, with the momentum expected to spread to broader industries later this year.

Despite the improved outlook, the OECD warned of several downside risks facing the Korean economy, citing potential supply disruptions linked to tensions in the Middle East and labor unrest in industrial sectors.

Additionally, the organization projected the country's consumer inflation to average 2.6 percent this year before easing to 2.2 percent next year.

“The OECD assessed long-term inflation expectations as remaining stable and viewed government measures such as price controls and fuel tax reductions as effective in easing inflationary pressure caused by energy supply disruptions,” a ministry official said. “At the same time, the OECD warned that these policies could prolong inflationary pressure and therefore advised that they be withdrawn gradually.”

Meanwhile, the OECD trimmed its global growth forecast by 0.1 percentage point to 2.8 percent while leaving its G20 outlook unchanged at 3.0 percent.

The OECD attributed the downward revision in its global growth outlook to mounting pressure from rising energy prices and disruptions to global trade following the closure of the Strait of Hormuz.

With the recent spike in energy costs linked to the Middle East conflict, the organization projected inflation among G20 economies at 4.0 percent this year and 3.1 percent next year.

Article source:  https://www.koreatimes.co.kr/economy/others/20260603/oecd-lifts-koreas-2026-growth-forecast-from-17-to-26-amid-semiconductor-surge

South Korea Consumer Prices: Ideas Later.

Consumer prices hit 26-month high, fueling rate hike expectations

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BOK sees inflation remaining above 3% amid prolonged Middle East tensions

Korea's consumer inflation accelerated to a 26-month high in May, driven by soaring oil prices amid the ongoing conflict in the Middle East, reinforcing market expectations that the Bank of Korea (BOK) could raise the base rate in July, market watchers said Tuesday.

Consumer prices, a key gauge of inflation, rose 3.1 percent last month from a year earlier, marking the fastest pace of growth since March 2024, according to data released by the Ministry of Data and Statistics.

The increase was largely driven by higher energy costs.

Prices of industrial goods rose 4.2 percent from a year earlier, while petroleum product prices jumped 24.2 percent, contributing 0.92 percentage points to overall inflation. This marked the steepest increase since a 35.2 percent surge recorded in 2022, following Russia's invasion of Ukraine.

The statistics ministry attributed the rise in consumer prices to a rebound in agricultural, livestock and fisheries product prices, as well as soaring oil costs linked to the conflict in the Middle East.

Market analysts said the stronger-than-expected inflation trend, coupled with the BOK's increasingly hawkish rhetoric, has strengthened the case for a rate hike in the coming months.

The central bank left its benchmark interest rate unchanged at 2.5 percent at its Monetary Policy Board meeting last Thursday, but signaled a more hawkish stance.

BOK Gov. Shin Hyun-song reinforced that message on Monday, saying Korea's stronger-than-expected economic growth poses "fewer impediments" to adjusting monetary policy in response to inflationary pressures.

"(Strong economic growth) gives us a lot more leeway to conduct monetary policy in an effective way to address inflation," Shin said.

Market expectations are growing that the central bank could begin raising interest rates as early as next month.

Park Seok-gil, an analyst at JP Morgan, projected 0.25 percentage-point rate hikes in July and October this year, followed by January and April next year.

"While growth is still led by the tech sector, spillover effects to domestic demand are expected, and demand-side inflation pressures are now being considered a major change," Park said.

Fitch Group also revised its outlook, saying it now expects the central bank to begin its tightening cycle in July and deliver two 0.25 percentage-point rate hikes, bringing the policy rate to 3 percent this year. The forecast marks a shift from its previous view that the BOK would wait until the fourth quarter to start raising rates.

Article source:  https://www.koreatimes.co.kr/economy/20260602/consumer-prices-hit-26-month-high-fueling-rate-hike-expectations

Japan Capital Spending: Jan.- March: Ideas Later.

Japan's capital spending in Jan.-March flat on year

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TOKYO (Kyodo) -- Capital spending by Japanese companies in the January-March quarter was almost flat from a year earlier, in a sign growth led by artificial intelligence-linked investment has slowed, government data showed Monday, as the Middle East conflict further clouds the outlook.

Investment by all nonfinancial sectors for purposes such as building plants and purchasing equipment edged up 0.047 percent from a year earlier to 18.81 trillion yen ($118 billion), a record-high, for the fifth straight quarterly gain, the Finance Ministry said.

Declines in the manufacturing sector, including of information and communication electronics equipment, were offset by gains among nonmanufacturers led by goods rental and leasing, the data showed.

A Finance Ministry official said that for the latest data, no significant impact from the Middle East conflict was observed but added that the government will continue to closely monitor the developments as well as movements in the financial markets.

Tensions in the Middle East have disrupted oil supply and petroleum products to the resource-poor country amid the effective closure of the Strait of Hormuz, with economic indicators showing consumer sentiment worsening.

The United States and Israel launched attacks on Iran on Feb. 28.

In the first quarter of 2026, pretax profits jumped 14.6 percent to 32.63 trillion yen, logging a rise for the sixth straight quarter, with profits by manufacturers of memory and other semiconductor-related devices surging 174.7 percent from a year earlier, it said.

Sales gained 1.1 percent to an all-time high of 408.66 trillion yen, on the back of robust manufacturing demand for AI, data centers and factory automation, it said.

The latest figures will be used to revise Japan's gross domestic product data for the January-March period, which showed the economy grew an annualized real 2.1 percent, marking the second straight quarterly expansion.

Based on the latest data, Takeshi Minami, chief economist at the Norinchukin Research Institute, said he estimates that the Cabinet Office's revised GDP data, to be released on June 8, will likely show a cut in economic growth to an annualized 1.3 percent on a larger fall in private investments.

"For the April-June period, economic growth will likely slow down as the Middle East conflict deteriorates consumer sentiment and is expected to weigh on exports, even as real wages are rising from the year earlier on a slowdown in the increase in consumer prices," he said.

Article source: https://mainichi.jp/english/articles/20260601/p2g/00m/0bu/015000c

Japan Firms and Supply Chains: Ideas Later.

Nearly half of Japanese firms lack supply-chain resilience measures

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TOKYO (Kyodo) -- Nearly half of Japanese companies have not implemented measures to protect their supply chains against disasters and global tensions, according to a recent Cabinet Office survey, raising the risk that factory or logistic shutdowns could halt production and impact the broader economy.

In a survey of 1,759 firms conducted between November and December, only 25.9 percent said they had measures in place to strengthen their supply chains.

Supply chain disruptions have recently prompted some food companies to change the packaging of their products because of concerns over naphtha supplies linked to worsening Middle East tensions.

Japan is prone to natural disasters with major earthquakes having disrupted production in the past.

The government plans to encourage companies to take measures, such as diversifying suppliers and dispersing production sites. A Cabinet Office official said more efforts are needed to "keep economic activity from stopping."

By company size, 26.8 percent of large companies with 1 billion yen ($6.2 million) or more in capital, 49.6 percent of midsize firms and 56.3 percent of smaller firms said they had taken no steps, the survey showed.

It also found larger firms were more likely to adopt measures to strengthen supply chains. Some 45.0 percent for large firms have carried out such steps, compared with 23.2 percent for midsize firms and 21.8 percent for smaller firms.

Among firms that said they were taking steps or were considering them, 57.9 percent cited "diversifying suppliers" as their most common measure. "Risk communication with suppliers" and "cooperation among companies and mutual support" followed, the survey showed.

Article source:  https://mainichi.jp/english/articles/20260601/p2g/00m/0bu/004000c