BOJ Increases Rate.

BOJ lifts policy rate to 31-yr high 1.0% on heightened inflation risks.

Article to be deleted after ideas.

Article:

TOKYO (Kyodo) -- The Bank of Japan lifted its key policy rate to a 31-year high of 1.0 percent on Tuesday, warning of the risk of heightening inflation risks stemming from elevated crude oil prices due to the Middle East conflict and the weak yen.

The central bank, in the absence of Governor Kazuo Ueda who has been hospitalized for medical treatment, raised the short-term interest rate from 0.75 percent in its first hike since December, saying that the recent U.S.-Iran agreement to end the war is a positive development but still leaves uncertainties over the economy.

The bank's rate hike after keeping it steady at the three previous meetings brings its policy back on a normalization track after a decade of unorthodox easing that ended in March 2024.

The BOJ said in its statement that there is a risk of underlying inflation rising above its target of 2 percent as rises in crude oil prices lead companies to hike prices in business-to-business transactions "at a relatively fast pace," which could "spread to an increase in consumer prices across a wide range of items."

BOJ Deputy Governor Shinichi Uchida told a post-meeting press conference that the bank will continue to raise the rate to stabilize inflation at around the 2 percent target, judging that even after the latest hike financial conditions remain accommodative.

Uchida said that one of the major reasons behind the rate hike decision is reduced risks to the economy due to factors such as government measures to secure alternative sources of raw materials including imports of oil from regions other than the Middle East.

Uchida also said that the bank is watching currency moves carefully. On Tuesday afternoon in Tokyo, the U.S. dollar was trading above the 160 yen line, the level where the Japanese financial authorities intervened in the currency market just over a month ago to support the yen.

"We do not target specific exchange rates in guiding our monetary policy, but we engage in policy discussions on the view that currency moves have a crucial impact on economic and price developments," he said.

Among the remaining eight policymakers excluding Ueda who discussed the policy change, the rate hike decision was opposed by Toichiro Asada, who joined the Policy Board in April and is viewed by the market as a proponent of reflationary policies and in favor of aggressive monetary easing.

In another policy change, the bank said it will pause the plan to reduce Japanese government bond purchases from the next fiscal year starting in April, at a time when long-term interest rates have been rising rapidly.

It will keep the current pace of reducing monthly purchases by about 200 billion yen every quarter for rest of this fiscal year, which would result in buying of around 2.1 trillion yen ($13 billion) per month in the last quarter of fiscal 2026.

But from April 2027 onwards, the bank will no longer reduce but steadily buy about 2 trillion yen a month under the new plan, citing the need to stabilize the bond market.

The BOJ decided in July 2024 to cut back its monthly government bond purchases as part of its efforts to normalize its monetary policy.

While raising the key policy rate could cool the economy by increasing borrowing costs for companies, restraining investment and dampening private spending, the central bank saw the need to respond to inflation risks following the launch of U.S.-Israeli attacks on Iran in late February and subsequent surges in crude oil prices.

The yen repeatedly falling to the 160 zone against the dollar, despite the Japanese authorities intervening in the currency market from late April to early May to curb the unit's fall, has also stoked concerns about rising import costs for resource-poor Japan.

Even if the U.S.-Iran conflict ends following the two countries' agreement to end the monthslong war, shipping through the Strait of Hormuz may not immediately stabilize, keeping transport, raw material and other costs elevated, analysts said.

But the agreement will relieve fears of disruptions in Japan's supply chains, serving to reinforce the view that the economy is resilient enough to withstand further rate hikes, they said.

The decision to raise the rate puts the BOJ in line with other central banks shifting toward tightening of monetary policy amid inflationary pressures, such as the European Central Bank, which hiked its rate last week.

The two-day policy meeting was chaired by BOJ Deputy Governor Ryozo Himino, after Ueda was hospitalized to treat a hepatic cyst infection. Ueda's hospitalization is "short and there will be no significant impact" on the BOJ's steering of monetary policy, Uchida said.

Inflation risks have been flagged after Japan's wholesale prices rose 6.3 percent in May compared to a year earlier -- the biggest increase in over three years. Firms are increasingly passing on rising costs from the war in Iran to the prices of their goods and services.

The data suggested that core consumer inflation may also accelerate, although it has been kept below the bank's 2 percent target because of government subsidies for electricity, gas and gasoline, the analysts said.

Article source:

https://mainichi.jp/english/articles/20260616/p2g/00m/0bu/014000c

Japan Big Company Sentiment: April- June Gtr. Updated June 15, 2026.

Japan big companies' sentiment sours in April-June qtr, hurt by Iran war.

Ideas

Business sentiment in most advanced and emerging economies is an very important economic indicator as it can drive stock markets, not just in one country but globally too if news comes out that Japan's business sentiment is down or even the US stock markets and globally can react negatively to the news.

Japan's economy is still an important economy globally as its still ranked among the top five economies in the world and as such most stock markets watch what is happening in Japan on a daily level, if not weekly, or even monthly.

Over the past several decades, business sentiment in Japan hasn't been that great as, for the most part, Japan has been mired in a stagnant economic phase that it hasn't been to be able to get out of, and maybe this is just another phase of the stagnation phase that the Japanese economy is in.

The Japanese economy, unfortunately, is very much a global export driven economy which means it relies heavily on the global economy and whenever there are disruptions, like now with the Middle East situation, it can easily have some economic shocks that disrupt the normal flow of the economy.

Japan is very much a major manufacturing economy still even though most of the economy is now based on services and technology but there is still a major manufacturing presence and the export side of the economy is heavily manufactured based.

As such, again any disruptions in the global economy can be a major challenge for many Japanese companies as a result companies can easily become disillusioned with what is happening and may find the global conditions not to their liking which means they might reduce hiring, reduce manufacturing and so on and then there is the idea of the increase in global prices which can affect Japanese companies significantly.

Business sentiment is like the stock market in that some or many companies can easily react negatively to whatever is happening not only in Japan but globally too as companies in Japan are constantly watching the global economy very carefully and for most companies, unfortunately, they don't have any real mechanisms to try and ride out any disruptions as again most companies seem to react instead of responding in a way that shows that it has taken a long term view of the situation and is not going to react negatively which can be cause challenges for its company.

Yes even non-manufacturers in the Japanese economy are feeling the affects of the increase of global prices and even in most sectors in Japan, the increase in raw material prices, the increase in wages and labor costs are affecting many companies both large and small.

It should be remembered that over 97 percent of most Japanese companies are small and mid-size companies and not the name-brand companies that always seem to be in the news. As such what happens to most small and  mid-size companies never hits the news and no one really knows or even cares, for the most part, what is going on with the small companies.

Again, while the index is an important and significant measurement to know what companies might be feeling or thinking about the Japanese economy and even more about the global economy it might not represent every company in Japan as a survey of 10,000 companies, while relevant is not every company in Japan an there might be just some companies who don't see or feel the same as the large companies do and or maybe some in different sectors of the economy might not see things the same way, so the survey, while important should always be taken with some kind of grain of salt.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260611/p2g/00m/0bu/016000c

Japan May Wholesales Prices: Updated June 15, 2026

Japan's wholesale prices up 6.3% in May, fastest rise in over 3 years

Ideas

For many years, Japanese companies both retail and wholesale were reluctant to increase prices and or pass-on their prices to the next in the supply chain including the final retail customer as they valued their relationships with their customers and tried to absorb their costs as much as they could.

But those days seem long gone, as material costs increase, the pressure to increase labor or wage costs continue to increase as companies, these days, feel they have no choice but increase costs and now, for some or many its survival in the marketplace.

Yes, it appears, all the pieces are falling into place for the BOJ to increase its key policy relate as a preventive measure to try and reduce inflation like many countries do when their inflation increases beyond what a central bank thinks it should be.

Most central banks prefer to see inflation at around 2 percent as they feel its a manageable level and many central banks thinks at that rate a country's economic activity is at a good level for the economy.

And again, if the BOJ does increase the rate to 1.00, even though there might be some negative side affects, to be sure, the BOJ has considered what the side affects will be and have taken into account how much the Japanese economy will be affected by the rate increase.

There is no real guarantee that the rate increase will slow inflation or even have a significant effect on inflation as a rate increase, for the most part,, is just a prescription like in medicine and sometime prescriptions work immediately and sometimes they take a while to work.

Yes, the wholesale price increases are usually delayed before they begin to affect consumer prices or retail prices as some companies might pass-on their increased costs immediately and some might wait and some might only pass-on parts of the price increase a little at a time to not cause too much stress to the final retail customer.

For a very long time, it appeared that BOJ in dealing with inflation was taking a hands-off approach and maybe was hoping the inflation would naturally decrease as some have suggested the BOJ felt the Japanese economy was just to weak to increase the key rate as their would be too many significant side affects affecting the economy.

As Japan is resource-poor country it depends on imports from many parts of the world, and whenever there are major disruptions in global supply chains Japanese can feel it as prices will go up and it takes sometimes up to six months for prices to decrease, if at all.

Japan is smart to look for alternative sources and it should not be an emergency situation to keep alternative sources close as there as recently there have been major disruptions in global supply chains since the covid situation, and as Japan's currency is very weak import prices to Japan are going to continue to be very high.

Japanese households have been stressed out by the increase in prices almost since the pandemic started and it doesn't look like it's going to change anytime soon in the future.

As a result Japanese households disposable income has been reduced which means less spending in the economy which of course means less economic growth.

The Middle East is more than just gas and oil and there are many more products coming out of that region and prices will continue to be high even after the situation calms down as prices and supply chain disruptions just don't go back to normal as it going to take months to everything back to some kind of normal.

And then, as has been seen previously, unfortunately, companies will try to keep prices high until they have re-couped what they might have lost due to the Middle East situation, as is evidenced during and after the pandemic with many airlines keeping prices high to get back their lost earnings.

Yes, the Middle East situation is affecting all up and down the global supply chain ecosystem and it doesn't look like it going to end anytime, as again, its going to take months to get the supply chain ecosystem back to some kind of normal and again its not going to happen overnight.

Companies, unfortunately, are  for the most part, only think about their current situation and the situation in how it affects their shareholders, and don't really think that much about the final retail customer, especially if the products they produce or buy in the Middle East is related to B2B type products or company needed products and not normal consumer type products.

Yes, again, companies, especially in the short term only think about their profits and usually don't think about the big picture which includes, or should include, shareholders, employee stakeholders, and the retail customer.

Once again, in years past, and now maybe many years past, Japanese companies were reluctant to pass-on their increased costs to the next in the supply chain and including the final retail customer, as they felt their relationship with customers were an important element of doing business and not just to make a profit, but those days may be long gone, for many companies in Japan now.

It must be remembered, that the Japanese yen is currently very weak which increases the price of imports into Japan and then add on the disruptions in the global supply chain and that too increases the price of most if not all import products coming out of the Middle East.

And exports are not exempt from prices increase related to raw material costs, increases in labor costs, and so on as export companies will increase their prices too as needed to protect their profits margins and then there is the continued situation with global supply chains and the increase in shipping that saw a significant increase in costs during the pandemic and the increase continues today.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260610/p2g/00m/0bu/017000c

Japan Economy in Jan.-March: Ideas Later.

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

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Article:

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

Article to be deleted after ideas.

Article:

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