BOJ and Possible Rate Change. Ideas later.

 

BOJ leaves policy rate unchanged at 0.75%, sharply raises inflation outlook

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Article:

TOKYO (Kyodo) -- The Bank of Japan on Tuesday kept its key interest rate at around 0.75 percent due to uncertainty over the Middle East conflict but sharply raised its inflation outlook for the current fiscal year, reinforcing expectations of a rate hike in the near future.

In its latest quarterly outlook report, released after the central bank stood pat for the third consecutive meeting in a widely expected move, the central bank said that core consumer prices, excluding volatile fresh food prices, are expected to rise by 2.8 percent in fiscal 2026, up from the 1.9 percent forecast in January.

It expects the Japanese economy to grow 0.5 percent in the current fiscal year that started in April, at a much slower pace than the initially projected 1.0 percent, as the rise in crude oil prices is expected to push down corporate profits and households' real income.

Three out of nine BOJ policymakers -- Hajime Takata and Naoki Tamura, both hawkish members, and Junko Nakagawa -- voted against the decision to keep the rate steady and called for a hike to 1.0 percent, noting that risks to prices were skewed to the upside.

The BOJ said elevated crude oil prices could fuel inflation in the country through driving up import costs of energy and goods but could also dampen growth through large-scale disruptions in supply chains.

Regarding the double risk, the bank said they could both heighten but that it will pay due attention to keep inflation from "significantly deviating upward" and exerting an adverse impact on the economy.

It noted that prices have already become elevated due to firms' behavior shifting more toward raising wages and prices.

Japan imports more than 90 percent of its crude oil from the Middle East, making it highly vulnerable to the effective closure of the Strait of Hormuz, which has disrupted the transportation of oil and petroleum products from suppliers in the Persian Gulf since the U.S.-Israeli attacks on Iran began on Feb. 28.

In the report, the BOJ kept its expectation that its 2 percent inflation goal will be attained between the second half of fiscal 2026 and fiscal 2027 that ends in March 2028.

For fiscal 2027, the BOJ said Japan's real gross domestic product is projected to grow 0.7 percent, down from the 0.8 percent projected in January, and 0.8 percent the subsequent year.

Core consumer price index is projected to rise 2.3 percent in fiscal 2027, up from 2.0 percent, and then decelerate to 2.0 percent in fiscal 2028. The bank released its forecasts for fiscal 2028 for the first time.

Despite the latest decision, BOJ watchers expect the Policy Board to raise the key interest rate -- currently at a 30-year high -- in the coming months.

The BOJ vowed to continue to raise the policy rate and consider the timing and pace of monetary adjustments while "closely monitoring" the impact of the future course of the Middle East situation on Japan's economy and prices.

The yen strengthened against the U.S. dollar shortly after the BOJ's announcement, briefly breaching the 159 line.

BOJ Governor Kazuo Ueda is scheduled to hold a press conference later in the day.

The Iran war has complicated the BOJ's efforts to further normalize its monetary policy following a decade of unorthodox easing that ended in March 2024.

The BOJ has maintained that its goal of achieving stable 2 percent inflation is within reach, but inflation caused by cost-push factors poses a challenge to the central bank, which aims to achieve price increases supported by wage increases and domestic demand.

Headline inflation numbers have stayed around the 2 percent threshold, but raising its policy rate to counter cost-push inflation would cool economic growth.

Still, maintaining market expectations for another rate hike is important to prevent the yen from falling further against the U.S. dollar, which could accelerate inflation in resource-scarce Japan via higher import prices.

Among overseas peers, the U.S. Federal Reserve is expected to keep its monetary policy steady at its policy-setting meeting this week amid the high uncertainty stemming from the Middle East conflict.

Article source:   https://mainichi.jp/english/articles/20260421/p2g/00m/0bu/002000c

Japan March Jobless rate.: Ideas later.

 

Japan jobless rate in FY 2025 rises to 2.6% as more people enter job market

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TOKYO (Kyodo) -- Japan's average unemployment rate in fiscal 2025 rose 0.1 percentage point from a year earlier to 2.6 percent, deteriorating for the first time in five years, as more people who were not previously working were counted as unemployed after starting to look for jobs, government data showed Tuesday.

In the fiscal year ended March, the number of unemployed people increased 50,000 to 1.80 million and the number of those with jobs grew 360,000 to 68.29 million, the highest level since comparable data became available in 1953, the Ministry of Internal Affairs and Communications said.

The number of employed women stood at 31.28 million, up 360,000 from fiscal 2024, also marking a record high.

Of those not in work, the number of people who lost their jobs climbed 10,000 from the previous fiscal year to 420,000, while 760,000 people left their jobs voluntarily, typically to seek better conditions. Those newly seeking jobs increased 30,000 to 500,000, according to the ministry.

In March alone, the unemployment rate rose to 2.7 percent from 2.6 percent in the previous month, increasing for the first time in two months, while the number of people with jobs edged down 0.2 percent to a seasonally adjusted 68.15 million, the ministry said.

Among those not in work, 430,000 were let go, unchanged from February, while 790,000 people left their jobs voluntarily, up 3.9 percent. Those newly seeking jobs increased 3.8 percent to 550,000, according to the ministry.

A ministry official said, "Employment conditions remain solid," citing the increase from the previous month in the number of people who quit their jobs to pursue better working conditions and are currently seeking new positions.

The official noted that "Overall, beyond the latest data, there is a broadly shared view that labor shortages persist," adding, "It has become easier for workers to pursue positions offering better employment conditions."

The average job availability ratio in fiscal 2025 fell 0.05 point from the previous fiscal year to 1.20, meaning there were 120 jobs available for every 100 job seekers, dropping for the third consecutive year, according to separate data.

The job availability ratio in March edged down 0.01 point from February to 1.18, falling for the first time in two months, according to the Ministry of Health, Labor and Welfare.

By industry, new job openings declined across seven sectors, led by information and communications with a plunge of 15.8 percent in March from a year earlier.

There were 6.5 percent fewer job offers in the wholesale and retail sector, while new job openings fell 6.4 percent in accommodation and restaurant services.

While no significant impact on employment has been seen so far amid the conflict in the Middle East, some in sectors including manufacturing have raised concerns about the outlook, a labor ministry official said.

Article source:   https://mainichi.jp/english/articles/20260428/p2g/00m/0bu/024000c

Japan March inflation. Ideas Later.

Japan March inflation rate rises to 1.8% on fuel cost hike amid Iran war

Article:

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TOKYO (Kyodo) -- Japan's core consumer prices in March rose 1.8 percent from a year earlier on higher energy costs due to surges in crude oil prices amid the Middle East conflict, government data showed Friday.

The rise in the nationwide consumer price index, excluding volatile fresh food, followed a 1.6 percent increase in February, when it climbed by less than 2 percent for the first time in nearly four years, according to the Ministry of Internal Affairs and Communications.

Core-core CPI, which strips away both energy and fresh food to reflect underlying price trends, rose 2.4 percent in March, decelerating from 2.5 percent in February.

For the fiscal year that ended March, core CPI increased 2.7 percent from a year earlier, largely reflecting surges in rice prices, which rose by a record-high 48.9 percent in the reporting year. But it stayed flat from fiscal 2024.

The end of the provisional gasoline tax on Dec. 31 led to a slowdown in rises in consumer prices in January and February but fresh inflationary pressure remains due to higher crude oil prices. The tax was abolished to ease the burden on households grappling with inflation.

For March, energy costs fell 5.7 percent after a drop of 9.1 percent in February, with gasoline falling 5.4 percent from the year before against a 14.9 percent drop the previous month.

Rising fuel costs could continue to be partially offset while a government subsidy program remains in place.

The government has decided to offer aid to wholesalers to keep the average retail price of gasoline to around 170 yen per liter. Before the financial support, the price hit an all-time high of 190.80 yen per liter on March 16. Japan depends on the Middle East for over 95 percent of its oil imports.

But a wide range of other products could see hikes in prices as manufacturers rush to find alternative sources after supplies of petroleum products were disrupted due to the effective closure of the Strait of Hormuz following the U.S.-Israeli attacks on Iran launched on Feb. 28, analysts said.

Petroleum products, specifically naphtha, are used to produce chemicals widely used in manufacturing products including plastics and critical medical supplies.

The weaker yen against the U.S. dollar, which has attracted buying as a safe-haven currency, is also feared to push up import costs, the analysts said.

Takeshi Minami, chief economist at the Norinchukin Research Institute, said it is highly likely that core inflation will remain elevated due to the protracted closure of the strait and rises in crude oil prices.

"Going forward, there is a possibility that the impact will spread widely, including price increases for petroleum-derived products such as plastics, rising food production costs due to difficulty in procuring fertilizers, and increasing logistics costs," he said.

Friday's data will be among materials to be studied at the Bank of Japan's two-day policy meeting starting Monday, when the Policy Board will decide if hiking the policy rate from the current 0.75 percent is necessary to sustainably achieve the 2 percent inflation target.

Without clear signals from Governor Kazuo Ueda about the need to hike rates amid the persistent uncertainties over the situation in the Middle East, market analysts expect that the bank will keep its monetary policy steady for now.

But Ueda has also signaled readiness to keep increasing the rate if the economy and prices move in line with its forecasts.

While the core inflation rate came below the 2 percent target for the second month in a row in March, the bank's new price index released late March to grasp underlying trends showed inflation rose 2.2 percent in February from the previous year.

The new indicator excludes the effects of policies such as free education programs, measures to ease the burden of fuel and utility costs as well as volatile fresh foods. The release of the index is widely viewed by markets as a precursor to a further interest rate hike.

Article source:  https://mainichi.jp/english/articles/20260424/p2g/00m/0bu/010000c

Japan and Labor Productivity: Updated April 26, 2026.

Japan aims to up labor productivity by 15% in 5 yrs to push growth

Ideas

The idea of encouraging reskilling and pushing digitalization is nothing new in Japan as its been a talked about strategy for a long time but due to costs or due to an ingrained work culture in Japan, that is resistant to change, it still hasn't taken off.

Its common to think Japan continues to fall behind other advanced economies but some  sectors in Japan are just as competitive and productive as some in the global economy but the problem seems to be many of the tradition old-school companies are still resistant to move forward.

Again, other Prime Ministers have outlined the same labor reforms needed to boost the economy but still not much has really taken off as it seems sometimes they are just slogans or strategies that really go now where.

But lets give the new Prime Minister some room to maneuver here to see if she can get things going on labor reforms and reforms in the Japanese economy.

Its a known fact that Japan has the lowest labor producing among the most advanced economies in the world, as the long supposed work hours, too many meetings, too many paper documents needed for un-needed things along with a top-down culture that stymies creativity and innovation in Japanese companies.

It's not the fault of non-regular employees causing the low productivity problem in Japan as they just want and need a job and would prefer to be full-time workers with decent pay and decent benefits. 

Its the companies fault trying to keep their profit margins at a level that pleases their shareholders, as these days, that's all that most companies care about and they really don't care about the workers in their companies, as they have, unfortunately, become to westernized in taking care of their shareholders instead of their employee

Not to criticize or be negative but this sounds like a political campaign speech and when all is said and done, not much is really going to happen and it will just be business as usual in Japanese companies and the market place.

Yes, but to be somewhat positive there will be some changes as some progressive companies will take upon themselves to make the needed changes to increase productivity and some might even work on improving the work culture that allows a better work/life balance for their employees, especially for working women with children.

Yes, the weak yen has something to do with the increase in prices but that's not the entire story as many companies, not all companies, are either resisting change or don't feel its needed to change to be globally competitive as they are only focused on the Japanese market and not the global market.

And then there is challenge of costs needed to upgrade, re-skill employees, and move more into digitization which costs money and takes a lot of time for some companies means taking away from their core mission or business.

The Japanese government and businesses have known for a long time there is/was going to be a labor and one of the main reasons of course is the low birth rate in Japan, due to the fact that either women don't want to go through what their mothers went through or the cost of raising children in Japan is just to costly.

And another reason is the situation where if a women works for a company gets married they automatically are expected to leave the company as Japan, in the past, has not been so kind to working women and children and the need to balance child  rearing and company life.

And then there is archaic and outdated idea that once you reach a certain age you are not able to be as productive as when you were younger and or companies have not been able to adjust the pay scale, which mean giving older workers a little less in salary and keeping them on due to all their knowledge and skills but Japan, as seen in the past, is still slow to change.

Japan is wasting their human resources related to women working for companies and older workers being thrown out due the fact that companies are not able to adjust even though there is a significant labor shortage and if both of these groups were used correctly the labor shortage might to go away but will be lessened significantly.

And then there is the age old problem of immigration as Japan for whatever reason, seems to think they are a homogeneous society and bringing in too many non-Japanese for work will pollute the culture when in fact Japan is mix of Chinese, Korean, and other ethnic groups and there is no pure ethnic group anymore.

Yes, the Japanese government is trying many ways to lesson the burden on working women but the problem companies have to cooperate and in many cases they are not cooperating and maintain their traditional way of doing things in Japanese companies.

And dual income families need help as the women seems to have much of he burden, still on raising the children, and while some companies are emphatic many companies still are not and expect women to be focused on their job and not about caring for their children.

As a result some or many women don't take jobs leading to management positions that might require too much time away from the family and taking care of their children. Its a problem in Japan that has yet to be resolved to the point that working women see companies on their side and want to move into management positions if the can.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260422/p2g/00m/0na/035000c

Japan Households Savings and Golden Week. Ideas later.

Japan household savings hit record high, but 'zero yen' tops Golden Week budget plans

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TOKYO -- Despite household savings reaching a record high in Japan, the most common budget plan for this year's long Golden Week holiday period is "zero yen," highlighting a growing preference for savings amid concerns that rising crude oil prices driven by heightened tensions in the Middle East will keep inflation high.

According to a survey released on April 16 by Meiji Yasuda Life Insurance Co., nearly half of respondents plan to spend the holiday period at home.

Asked how much they plan to spend during Golden Week, 29.3% chose "zero yen," the largest share, followed by 17.8% who plan to spend "10,000 yen (around $63) or more but less than 20,000 yen (around $126)" and 12.8% who said "50,000 yen (around $314) or more but less than 100,000 yen (around $630)." While 21.7% said they would spend less than last year, only 4.3% said they would spend more.

At the same time, polarization in spending has become more pronounced. Among those who plan to spend more, the average increase was 79,514 yen (around $500), about 20,000 yen higher than last year.

As for how they plan to spend their holidays, "staying at home" was the most common answer at 46.7%, followed by "undecided" at 22.5% and "domestic travel" at 14.4%. Average household savings rose by 2.84 million yen (around $17,860) from a year earlier to 18.47 million yen (around $116,120), marking a record high for the second consecutive year since the survey began in 2017.

The survey, which asked about household finances, was conducted online from March 9 to 16 among 1,620 men and women ages 20 to 79 nationwide.

Takafumi Fujita, chief researcher at the Meiji Yasuda Research Institute Inc., said, "People are directing increased income toward savings to protect their own livelihoods, and there seems to be limited room to channel it into consumption." He also voiced concerns that surging crude oil prices could further drive inflation, adding, "Stable global conditions are essential for sustainable growth in consumption."

Article source: https://mainichi.jp/english/articles/20260421/p2a/00m/0bu/022000c

Japan Trade Deficit: Ideas later.

Japan logs trade deficit in FY 2025 for 5th yr in row, hit by US tariffs

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TOKYO (Kyodo) -- Japan logged a trade deficit of 1.71 trillion yen ($10.7 billion) in the year through March, remaining in the red for the fifth straight year, as higher U.S. tariffs implemented since April 2025 dragged down auto exports, government data showed Wednesday.

The country's trade deficit has been declining since a massive 22.09 trillion yen of red ink in fiscal 2022 amid the coronavirus pandemic, but it could widen this business year due to the Middle East conflict, which will drive up imports by value amid elevated crude oil prices, economists say.

In fiscal 2025, the trade deficit shrank 68.4 percent from the year before, the Finance Ministry said in a preliminary report.

Exports rose 4.0 percent to 113.24 trillion yen on the back of demand for semiconductors and other electronic devices, while imports edged up 0.5 percent to 114.96 trillion yen from a year earlier amid rising prices for platinum and other nonferrous metals, it said.

The trade deficit with the United States fell 22.1 percent to 7 trillion yen, the biggest drop since fiscal 2008, as exports declined 6.6 percent for the first decrease in five years, while imports rose 4.3 percent.

Motor vehicles, including buses and trucks, were the largest item contributing to the decline in U.S.-bound shipments, with cars falling 16.0 percent from a year earlier.

While U.S. import duties on Japanese cars were lowered in September to 15 percent, from 27.5 percent imposed in April 2025, under a trade deal struck by Tokyo and Washington, they remained six times higher than the 2.5 percent tariff in place prior to U.S. President Donald Trump's return to the White House.

"While sales of Japanese hybrid cars are robust in the United States" due to their fuel-efficiency and affordable prices, exports fell in fiscal 2025 after a sharp rise the previous year on increased demand before the implementation of the U.S. tariffs, a ministry official said.

For March, Japan recorded a trade surplus of 667 billion yen, up 25.9 percent from the previous year. Crude oil imports rose 2.4 percent for the third straight month by volume.

As for the impact on oil imports of the U.S.-Israeli war against Iran, the official noted that the data reflected fuel shipped from the Middle East before the launch of the attacks on Feb. 28, adding the government had pushed to secure supplies from other regions such as the United States.

Still, some impact from the conflict was seen in the reported month, with exports to the Middle East falling 45.9 percent to 225.71 billion yen and imports dropping 10.7 percent to 878.81 billion yen.

Japan's imports of petroleum spirits, derived from oil distillation and used as solvents and fuel, also fell 25.3 percent, likely due to the Middle East war and traffic disruptions in the Strait of Hormuz, the official said.

Koya Miyamae, senior economist at SMBC Nikko Securities Inc., said the protracted effective closure of the strait will dampen imports of crude oil from the Middle East and other related products from Asia, while Japanese companies' shipments, including autos, to the region are also likely to fall significantly.

Miyamae estimated that if crude oil prices move around $100 per barrel, the fiscal 2026 deficit is likely to expand to 10 trillion yen, with the possibility it could balloon to 15 trillion yen.

Article source:  https://mainichi.jp/english/articles/20260422/p2g/00m/0bu/019000c

Bank of Japan Possibilities: Ideas later.

Bank of Japan likely to maintain policy rate, lift growth forecasts

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TOKYO (Kyodo) -- The Bank of Japan is expected to keep its benchmark interest rate steady for a third straight meeting at its two-day policy meeting next week, sources familiar with the matter said Monday, as it assesses the impact of inflationary pressures amid stubbornly high crude oil prices.

The benchmark rate is likely to be left unchanged at 0.75 percent, with the Policy Board also expected to announce at the end of the meeting on April 28 an upward revision to its economic and inflation forecasts for fiscal 2026, the sources said.

The central bank has been considering raising rates as it views the current level as significantly low after accounting for inflation. It may, however, wait until late in the meeting to decide amid uncertainty over U.S.-Iran ceasefire talks.

"It is extremely difficult to determine how to respond to (escalating tensions in the Middle East) with monetary policy," BOJ chief Kazuo Ueda said at a press conference in Washington last week.

"We will assess the risks to determine policy," he added.

The BOJ is expected to maintain its push to raise interest rates on the back of sharp pay hikes seen in this year's "shunto" wage talks, but is believed to have weighed the risk of stagflation -- a state of high inflation, high unemployment and sluggish economic growth -- as crude oil prices surge due to the U.S.-Israeli attacks on Iran.

The bank, which lifted its benchmark rate to 0.75 percent in December, will announce its outlook report, which includes its real gross domestic product outlook for fiscal 2026 through 2028.

Article source:  https://mainichi.jp/english/articles/20260421/p2g/00m/0bu/002000c