Bank of Japan keeps rate unchanged: Ideas later.

Bank of Japan keeps policy rate unchanged as Iran war complicates next step decision

Article source:  https://mainichi.jp/english/articles/20260319/p2g/00m/0bu/023000c

Article to be deleted after ideas.

Article:

TOKYO (Kyodo) -- The Bank of Japan on Thursday kept its benchmark interest rate unchanged, as developments in the Middle East complicate the future path of its monetary policy.

With the Iran war threatening to drive up inflation and dampen economic growth, the central bank is bracing for the upside and downside risks to the price and economic outlooks.

BOJ Governor Kazuo Ueda said at a press conference after its two-day policy meeting through Thursday that he "needs more time" to understand the impact the war will have on the economy.

"We have decided to keep the policy unchanged as risks associated with rising crude oil prices have newly emerged," Ueda said. "We will make an appropriate policy decision next month after examining the new risk scenario and outlook when more data become available."

The bank has been seeking to normalize its monetary policy since it ended unconventional monetary easing two years ago to stably achieve its 2 percent inflation target.

If the central bank continues raising its policy interest rate to tame possible higher inflation at a time when an energy price surge threatens to dent demand, the move could add pressure on growth, while leaving the policy intact could fuel inflation coupled with the yen's recent weakening. A weaker yen increases import costs.

Still, Ueda said more policymakers are aware of the upside risk to inflation.

The U.S. Federal Reserve, which also decided to keep its rate steady at its meeting through Wednesday, also warned of higher inflation with Fed chief Jerome Powell emphasizing uncertainty over the U.S. economic outlook from the Iran war.

At the policy meeting, the BOJ left the key rate at around 0.75 percent for the second consecutive meeting.

The Japanese central bank lifted its policy rate to a 30-year high of around 0.75 percent from 0.5 percent at its December meeting.

The latest decision to stand pat on the rate was delivered in an eight-to-one vote, with hawkish policymaker Hajime Takata proposing a rate hike to around 1.0 percent.

The nationwide core consumer price index, excluding volatile fresh food, in Japan is expected to come under "upward pressure," affected by the rise in crude oil prices, the bank said in a post-meeting statement.

The yen's recent depreciation against the U.S. dollar is also threatening to raise import costs for resource-poor Japan.

The dollar came within striking distance of the 160 yen mark overnight, a level unseen since 2024 prior to the BOJ's meeting, prompting Finance Minister Satsuki Katayama to say Japanese authorities are on "full guard" and ready to consider all possible options.

In the wake of the U.S.-Israeli launch of attacks on Iran, the dollar has drawn buying, as a safe-haven asset in times of crisis. Tokyo shares have also faced steep declines with uncertainties heightening over the effects of the Middle East crisis on inflation and the broader economy.

The war with Iran has effectively closed the Strait of Hormuz, through which many oil tankers pass, including those bound for Japan. There has also been damage to liquefied natural gas export facilities.

Soaring crude oil prices will likely push up the prices of many products, from gasoline to plastics. Electricity and gas bills could also rise if liquefied natural gas prices climb alongside oil prices.

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Foreign Visitors to Japan in Feb. Ideas Later.

Foreign visitors to Japan in February set monthly record of 3.47 mil.

Article source:  https://mainichi.jp/english/articles/20260318/p2g/00m/0na/041000c

Article to be deleted after ideas.

Article:

TOKYO (Kyodo) -- The number of foreign visitors to Japan in February rose 6.4 percent from a year earlier to 3.47 million, the highest monthly total on record, boosted by travelers from East Asia over the Lunar New Year holidays, government estimates showed Wednesday.

By origin, South Korea topped the list with 1.09 million visitors, up 28.2 percent, followed by Taiwan with 693,600, up 36.7 percent, according to the Japan National Tourism Organization.

The number of travelers from 18 countries and regions, including the top two and the United States, set new visitor records for February.

Visitors from China, meanwhile, declined for the third consecutive month, falling 45.2 percent from the previous year to 396,400. Entries of Chinese nationals have plummeted since Beijing urged its citizens not to visit Japan due to diplomatic tensions over Taiwan.

Total foreign visitor numbers to Japan in January dipped for the first time in four years as Chinese visitors plunged 60.7 percent from the previous year.

The tensions stem from remarks made in November by Japanese Prime Minister Sanae Takaichi about how Japan might respond to an emergency in Taiwan, a self-ruled island China sees as part of its territory.

Japanese Major Firms and Wage Increases: Ideas Later.

Major Japan firms offer large pay hikes in spring negotiations

Article source: https://mainichi.jp/english/articles/20260318/p2g/00m/0bu/032000c

Article to be deleted after ideas.

Article:

TOKYO (Kyodo) -- Many major Japanese companies, including Toyota Motor Corp., on Wednesday fully met their labor unions' demands for wage hikes in annual negotiations, despite the expected increase in costs from higher crude oil prices.

Unions, however, at smaller companies could struggle to win similar wage hikes. Such firms tend to find it harder to pass on higher costs to their customers, especially with the rise in oil and other material prices caused by the crisis in the Middle East.

Seen as a trendsetter at the annual "shunto" wage talks, Toyota, the world's largest carmaker by volume, fully met its labor union's pay hike and bonus payment demands for the sixth consecutive year.

The automaker is proposing pay increases of up to 21,580 yen ($135) per month while accepting its union's request for an annual bonus equivalent to 7.3 months' pay, down 0.3 month from last year's record-high payment.

Honda Motor Co., which expects its first full-year net loss in the year ending March 31 since its listing nearly 70 years ago, accepted an 18,500 yen pay hike request, while Suzuki Motor Corp. offered a pay increase of 20,500 yen, exceeding its union's demand.

Struggling Nissan Motor Co. has consented to a monthly pay hike of 10,000 yen as requested by its union, aiming to increase employee morale during its restructuring efforts.

Hitachi Ltd., NEC Corp. and Mitsubishi Electric Corp. each agreed to a monthly base pay increase of 18,000 yen, as sought by their unions.

Major heavy machinery manufacturers Mitsubishi Heavy Industries Ltd., Kawasaki Heavy Industries Ltd. and IHI Corp. also agreed to their labor unions' demands for a 16,000 yen pay increase.

Other companies including Mazda Motor Corp. and Japan Airlines Co. have already met their labor unions' demands although the annual wage talks at major firms typically run from mid-February to mid-March.

Meanwhile, pay hike proposals by Nippon Steel Corp., Kobe Steel Ltd. and JFE Steel Corp. fell short of their unions' demands. The steel industry has been hit by worsening market conditions amid an influx of cheaper Chinese products.

With inflation persisting, major companies mostly offered wage hikes of around 5 percent to 7 percent. "We are seeing solid progress that could lead to a virtuous cycle of growth and wealth distribution across the society," said Yoshinobu Tsutsui, chairman of the Japan Business Federation, also known as Keidanren.

Chief Cabinet Secretary Minoru Kihara said at a press conference that the government "hopes that strong (pay hike) momentum will steadily spread to every corner of the country, small and medium-sized enterprises and nonregular employees," emphasizing the importance of achieving wage increases that outpace inflation.

The Bank of Japan, which raised its benchmark interest rate last December to its highest level since 1995, is also closely monitoring the outcome of the wage talks as it sees rises in both wages and prices as key factors for its future policy.

In its basic policy for the 2026 wage negotiations, the Japanese Trade Union Confederation, the country's largest umbrella organization for labor unions known as Rengo, has set an overall wage hike target of 5 percent or more for the third straight year.

Rengo has set a higher goal of 6 percent or more for unions representing small and medium-sized enterprises, which employ about 70 percent of the country's workforce, aiming to narrow the pay gap with larger companies.

Japan Trade Surplus: Ideas Later.

Japan logs 57.3 billion yen trade surplus in Feb., helped by chip exports

Article source:  https://mainichi.jp/english/articles/20260318/p2g/00m/0bu/014000c

Article to be deleted after ideas.

Article:

TOKYO (Kyodo) -- Japan logged a trade surplus of 57.3 billion yen ($361 million) in February, helped by a rise in chip exports to other Asian countries, government data showed Wednesday, but the Iran conflict and concern over oil supply disruptions cloud the outlook.

Exports rose 4.2 percent to 9.57 trillion yen, up for the sixth consecutive month, while imports increased 10.2 percent from a year earlier to 9.51 trillion yen, both marking record highs for the month, the Finance Ministry said in a preliminary report.

With Japan's imports of chips and other electronic parts from other Asian countries also robust, the data showed the products, widely used in high-tech products, are becoming an increasingly active part of Japan's global trade, analysts said.

The latest trade data did not reflect developments after the launch of the U.S. and Israeli attacks on Iran on Feb. 28, a ministry official said, with the analysts predicting that rising oil costs could deal a blow to an economy heavily reliant on fuel imports.

The potential impact of disruptions in supplies of fuel and petroleum products on the trade balance will be closely monitored as the Japanese government has vowed to respond with all possible measures, the official said.

Takeshi Minami, chief economist at the Norinchukin Research Institute, said the impact of the Iran conflict on the trade balance is likely to be apparent from late March onwards, with the plunge in crude oil imports due to the effective closure of the Strait of Hormuz expected to affect Japanese businesses' output and trade.

"The government has released crude oil stockpiles and decided to provide fresh gasoline subsidies, but there is a possibility that the increases in energy prices going forward could hamper recovery in consumption," he said.

In the reporting month, Japan's exports to the United States fell 8.0 percent to 1.75 trillion yen, dropping for the third straight month, as shipments of motor vehicles declined 16.6 percent in value terms, weighed down by President Donald Trump's tariffs.

While import duties imposed on Japanese cars were lowered to 15 percent from 27.5 percent in September under a trade deal struck by Tokyo and Washington, they remained six times higher than the 2.5 percent tariff in place prior to Trump's return to the White House.

Japan remained in the red with China for the 59th straight month, logging a trade deficit of 967.3 billion yen in February.

Exports to the world's second-largest economy declined 10.9 percent to 1.37 trillion yen, and imports jumped 35.4 percent to 2.34 trillion yen, hitting a record high for the month.

Japan Household Spending Down: Updated March 18, 2026

Japan Jan. household spending down 1.0% on year on lower education outlays

Article source: https://mainichi.jp/english/articles/20260310/p2g/00m/0bu/010000c

Ideas

Ever since the pandemic or just after it, Japan has consistently had high inflation which has constrained household spending in Japan as disposable incomes have been decreasing over the last 3 or years, and as suggested in the article something has to give such as spending on education and communication services.

A decrease of 1.0 percent might not seem like that much but an economy the size of Japan a 1.0 decrease in spending might actually be quite large and as it was the second monthly decline Japan households are feeling the affects of inflation and are cutting in areas as needed.

 While 307,584 yen might seem a lot for some or not a lot for some depends on the overall level of income of the household as some lower-income households in Japan just don't have that much to spend to begin with so the average might be for the middle to upper-middle income groups but not the lower-income groups which are much more affected by inflation than the other groups.

Back in the early to mid 80's or even into the 90's Japan might have been considered a upper-income country or even a high-income country but those days are long gone as Japan wages have not kept up with wage increases globally and the average Japanese household makes much less than the households these days in the EU or even the US.

The university/college age population continues to decrease and some or many private universities and colleges in Japan are seeing their enrollments drop significantly have been decreasing tuition as a way to entice students to enter their respective schools.

At the same time, Japanese universities are increasing their foreign student enrollments to counter the decrease in Japanese students with more foreign students, but it remains to be seen if Japan immigration will actually allow enough foreign students into the country to offset the continued decrease in the Japan population.

The ageing Japanese population and the decrease in births in Japan has been a constant stress on Japan society for a very long time but, while other economies and other counties use increased immigration to help the situation Japan has not kept up with what other countries are doing as some have even suggested that Japan doesn't want to pollute its culture with too many foreign residents.

Yes, as inflation continues to reduce the disposable income of Japanese households, consumers continue to find ways to reduce their costs with even looking for cheaper mobile phones, which most likely are coming from China or even South Korea these days.

While utility bills might have decreased due to higher temperatures in December, it might not have been good for the clothing industry in Japan as the higher temperatures might have reduced spending at some retail places related to winter clothing and maybe might have forced some retail outlets to begin to advertise their spring selection of clothes.

At the same time, even though the temperature might have been much higher than expected utilities bills for the lower-income groups might still have been more than what they wanted to pay as they are on limited budgets and especially the fixed-income group groups and even the un-married women with children who don't have good jobs or working more than one part-time job just to make ends meet unfortunately.

Of course due to the continued inflation situation in Japan disposable incomes have decreased which means Japanese households have cut back on anything they feel they can do without on a temporary basis.

It seems housing expenditures, more likely have also increased to the point that households again feel they can and need to do without them as maybe, like everything else, costs have increased where its costs even more to get a house repaired in Japan these days.

Food, for most Japanese households sometimes sees an increase and sometimes sees a decrease depending on the mood of the families and the income level of the families too. Consumers, people can only cut-back so much before they feel the need to spend and buy things that make them feel good including food, which has a powerful effect on many. 

But of course the lower-income groups might see things differently as they have little extra to spare and can't splurge on dining out or even the normal fruit favorites that some families enjoy.

Durable goods are not a normal everyday purchase just food is an households buy them or save up to buy them when they really need them. In this case maybe Japanese households felt the need to finally get a new AC or washing machine as they maybe waited a long time due to the inflation situation in Japan and felt they couldn't wait any longer.

The Olympics, or the Football/soccer world Cup, or the World Series, or the World Baseball Classic are events that can encourage households to get a new television, and has Japan had a historic Winter Olympics maybe more Japanese households wanted to see what was going on.

Private consumption or consumer spending is estimated to be about 50 percent of Japan's GDP, while in the US its estimated to be about 68 percent as most likely Japan's might be a little too low and is not enough to really improve economic growth in Japan.

The average monthly income is just an average as most likely the real amount is much lower as it must be remembered that up to 70 percent of Japanese workers in Japan don't work for the large name-brand companies but for small and mid-size companies, which it is estimated to make up 99 percent of all companies in Japan.

It would be good if every two person households made 530,520 yen each month but most likely that is far from reality as Japan's inequality has been increasing every year since the early 90's when the asset bubble crashed in Japan.

while inequality is relatively mild compared to other countries, Japan has its share of those in the low-income groups, and they suffer like other low-income groups too globally.

Due to large companies, in Japan, having become more westernized, they have move toward a model of valuing shareholders over normal workers in a company which means many companies have moved toward only hiring part-time workers, contract workers, and for the most part less workers as needed to ensure shareholders get what they need or want each month.

Have a nice day!

Japan Economy Growth: Ideas Later.

Japan economy grows 1.3% in Oct.-Dec., revised up, on stronger investment

Article source: https://mainichi.jp/english/articles/20260310/p2g/00m/0bu/012000c

Article to be deleted after ideas.

Article:

TOKYO (Kyodo) -- Japan's economy expanded an annualized real 1.3 percent in the October-December quarter, revised up from an initially reported 0.2 percent increase, on stronger business spending as Prime Minister Sanae Takaichi pushes investment in priority areas, government data showed Tuesday.

Helped also by an uptick in private consumption, accounting for over half of gross domestic product, the GDP data marked the first rise in two quarters. Yet, crude oil price rises due to a Middle East conflict overshadow the economic outlook for resource-poor Japan, economists say.

Real GDP, adjusted for inflation, grew 0.3 percent from the previous quarter, compared with the initially reported 0.1 percent increase, the Cabinet Office said. GDP is the total value of goods and services produced in a country.

Capital spending increased 1.3 percent in the three months through December, revised up from a 0.2 percent increase, after data showed solid corporate investment in building data centers and producing semiconductor-making devices amid the spread of artificial intelligence.

With labor costs rising, companies have also been pushing digitalization and other labor-saving measures, resulting in purchases of software, the economists say.

Public investment was upgraded to a 0.5 percent dip from a 1.3 percent decline.

Private consumption grew 0.3 percent in the October-December period, in an upward revision from a 0.1 percent climb, reflecting increased demand for new smartphone models, but car purchases declined and persistent inflation dampened spending for food.

The revision was also due to a reduction in the margin of decline for spending on toys, games, fisheries and outlays for dining, a Cabinet Office official said.

Housing investment was slightly revised upward to a 4.9 percent rise from the 4.8 percent increase reported earlier.

Exports and imports both slid 0.3 percent, unchanged from the preliminary reading.

U.S.-bound shipments of cars remained affected by the imposition of higher tariffs by U.S. President Donald Trump that took effect in September. Spending by foreign visitors to Japan, which contributes to export figures, also fell.

Due to the moderate recovery in personal consumption and expected growth in real wages on slower inflation, the Japanese economy is estimated to grow in the January-March quarter, said Yoshiki Shinke, senior executive economist at Dai-ichi Life Research Institute.

He warned, however, that the recent increase in crude oil prices, stemming from U.S.-Israeli attacks on Iran since the end of February, raises uncertainties from the April-June quarter onwards for Japan, which relies almost entirely on foreign energy to power its economy.

Shinke said, "If rising energy prices continue, they will raise inflation," which will hurt the economy by reducing household spending. He added that companies are expected to pass on the increase in costs to consumers by raising the prices of their products and services.

Nominal GDP expanded an annualized rate of 3.5 percent, revising up from a 2.3 percent gain reported earlier.

Japan Real Wages in Jan. Updated March 16, 2026.

Japan real wages up 1.4% in Jan., 1st rise in 13 months, as inflation slows

Article source: https://mainichi.jp/english/articles/20260309/p2g/00m/0bu/018000c

Ideas

While real wages in Japan might have increased 1.4 percent its going take wages to increase more and for Japanese consumer to think, see, and feel that their purchasing power has increased enough to start spending in the economy again or enough to see any economic growth.

Prices, for the most part, have been increasing steadily ever since the pandemic or about that time, and Japanese consumers have not been able to feel good about their overall purchasing power and as such have not spent as needed in the economy to really see any economic growth, as suggested, consumer spending makes up about half of Japan's GDP.

Nominal wages are nothing more than inflation tacked on to wages to make it look like Japanese households have seen an increase while in reality they have seen a decrease in their purchasing power or in the amount of yen, money, as it has has less value in the economy.

Some might think, as its a common idea, that nominal wages are good and taken without inflation might actually be more than what is called real wages which take into account the subtraction of inflation and the real amount that consumers take home.

Unfortunately, global companies and especially global energy companies, will use any reason to increase the price and they won't wait to see what is going to happen as they want and need to protect their profit margins from any increase in costs.

It has been suggested that Japan and South Korea are two of the most vulnerable economies that are going to be affected by the Middle East conflict as they are energy-dependent countries and need to import much if not all energy commodities for their respective countries.

An increase of only 1.7 percent could be seen as being light at the end of the tunnel as maybe just maybe consumers prices are either decreasing and or beginning to stabilize and consumers could begin to see their purchasing power begin to get back to some kind of new normalcy again.

But its going to take more than one month of decreased consumer prices for consumers to see, feel, and think that things are getting back to some kind of normalcy as some might think its been this way ever since the pandemic.

Again, its going to take many more months of prices increase to be lower than the 2 percent inflation target at the BOJ has suggested as a target goal before it really does anything more significant with rate increases or even decreases.

But the key, as always is going to be labor-management wages negotiations as the BOJ is looking for companies to increase wages to the point that they think it might help Japanese households begin to feel good about their wages and begin to spend in the economy again.

But the problem is, as suggested, up to 70 percent of Japanese workers don't work for the large name-brand companies but small and mid-size companies that might not have the resources and or the profits margins to increase wages enough to keep their workers happy. The workers of course might not quit but again might not feel good about their overall purchasing due to less than expected wage increases in April 2026.

While a wage increase of 5.39 percent might be good, at least for the large companies, will the small and mid-size companies do the same or will they have to give wage increases a little less because of their profit margins can't handle the 5.39 percent increase.

The Japanese economy, society, is not just the major name-brand companies that always make the news as its been suggested that small and mid-size companies actually make up 99 percent of all companies in Japan, but as with any other economy the large companies make up most of the noise and or take most of the attention.

As usual or as normal, negotiations always start at a point where both sides agree or agree to disagree and then they work from there. Its less than a month now before the actual rate increase will be announced as again no one knows for sure just what the real percent is going to be and the real story is what are the small and mid-size companies going to do or what can they do even though might want to increase wage more but just can't do it.

labor always asks for a larger wage increase knowing full well that they might not get it but its a starting point that they hope they can get close to if not the exact amount.

Yes, real wages are the key and not nominal wage as real wages affect private consumption or consumer spending and if Japanese households, again, don't see, feel, or think their wages are enough they are not going to increase their spending in the Japanese economy and the economy is not going to grow to it full potential.

The Bank of Japan of course hopes the wage increases will be enough to put a dent in the inflation situation in Japan and hopes wage increases will be enough that Japanese households, again, begin to feel, see, and think their purchasing power has increased enough to begin to spend again in the economy.

And if that happens the BOJ might not increase the rate that much but just enough to give it some room in case it does have to decrease the rate again someday.

But the Bank of Japan is a very conservative agency and is not going to do anything if they feel the inflation target is not within reach and or if the wage increases are not enough for them to do anything that will make a significant contribution to the economy.

Have a nice day!