BOJ and Possible Rate Change. Ideas later.

 

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

Article to be deleted after ideas.

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.: Updated April 29, 2026.

 

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

Ideas

Japan, as with most advanced economies, probably doesn't count people who are not looking for work as part of the unemployment group, but once they start looking they then are added to the list.

Most likely, as Japan is the midst of a suppose labor shortage, those who previously had given up might now be more hopeful of finding and job and now are looking for a job even though they are still unemployed.

The paragraph seems a little unclear as to what does the highest level mean? Is it about the number of unemployed or the number of those with jobs? It needs to be just a little more clear for the readers. But more likely of course its talking about the number of those with a job, while a good thing, the idea that Japan is in the midst of a so-called labor shortage, then, doesn't make sense, but who really knows exactly as the Japanese economy has many layers which are sometimes hard to comprehend.

The increase in the number for women that are employed is a very good metric and Japan needs more women to work and because of the inflation situation in Japan that continues on,  more married women with children are working and maybe more companies are now more empathetic toward the needs of working women with children as they need to balance both home and work at the same time.

And yes, as again there might be a real labor shortage, being able to find new work makes it much easier to find a new job in Japan, and as such maybe people can't wait or the circumstances don't allow them to work and find and new job at the same time, so they just quit knowing or thinking its much easier to find a job after I quit my current job.

The unemployment rate in Japan at either 2.7 or 2.6 not that big of a change and even a 0.1 percent change is nothing to worry about or get upset about as sometimes it just happens from month to month.

Japan still has one of the lowest unemployment rates among advances nation as the rate in the US is around 4.3. to 4.6, which for them is a little high. But at the same time, no country will ever have a zero percent rate and there are always going to be people in and out of the work force.

And with the 430,000 who were let go, which in decades past was not very common, but as many Japanese companies have become more westernized they are now using more western company practices including the laying off of workers, as they prioritize shareholders over workers now.

At the same time as 550,000 more were now seeking jobs, this could be that in March is when universities and colleges in Japan have their graduations which means it quite possible that there could be 550,000 new college graduates who are looking for some kind of job.

Yes, its very possible, if the employment conditions are solid, workers can sense or know that its easy now to get a better job with either better pay or a better work/life balance situation in Japan.

Unfortunately, though not noted here, there are many small and some mid-size companies that just can't give better pay and or because of their profit margins they actually might be losing workers as workers move to other companies, as they need to take care of their families and seek out more pay and maybe again better work/life conditions.

The jobs availability ratio might be just a little misleading as it doesn't really say or tell just what kinds of jobs are available as it could be that companies that have lost workers might be looking for workers but, unfortunately, even though they want to pay workers a better wage they just cant' do it as their profit margins just don't allow it as their profit margins are stretched to the limits with maybe raw material cost increases, energy cost increases, and of course labor costs too due to the so-called labor shortage and many workers looking for better pay or better work/life conditions.

Its interesting, while all the news is saying there is a so-called labor shortage, the article here suggests that some sectors have less job openings, but again, the Japanese economy is a large complex economy with many sectors and some or many actually could be in a so-called labor shortage as maybe they just can't pay what workers want while those sectors that now don't have new job openings have seen increases in workers and they are able to pay what workers need and want at at this time.

Yes, there are always concerns with Japanese companies that do business globally that the Middle East situation is always going to be there, unfortunately, and many companies have probably have drawn up contingency plans or emergency plans to deal with any global crisis as it evolves

But at the same time, not to be too pessimistic, some or many Japanese companies, that tried to venture into the global arena had to leave and just focus on the Japanese domestic economy as they, for whatever reason, didn't meet their expectations or the global market expectations and the Japanese smartphone market is the perfect example as they just can't compete with Apple smartphones or Samsung smartphones and now the up and coming Chinese smartphones in the global market.

Have a nice day!

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

Japan March inflation. Updated on May 4, 2026.

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

Ideas

Japan is resource-poor country and as such is subject to global price increases and with the Middle East situation energy, gas, and oil prices continue to increase along with a host of other products and commodities from that region of the world.

Japan has suggested they have a good enough emergency supply to handle potential energy shortages but only time will tell, as Japan doesn't produce to make any real oil so it be interesting to see just what Japan does.

Food prices continue to remain high or higher than usual in Japan it seems ever since the pandemic and it's almost cheaper at times to eat out than buy food at the local supermarket. 

Comparing buying or going to lunch in Japan is significantly cheaper than the US and even getting take out is much cheaper and Japanese restaurants don't require tipping and they strive for a quick turnover of customers which actually lowers the cost per customer while US restaurants and even fast food places keep increasing the price not to mention the high cost of delivery now in the US.

Ever since the summer of 2024, rice prices have skyrocketed or seems to have increased to the point that regular Japanese families have challenges buying rice now.

Rice prices might have stayed flat in 2024 but there was major rice shortage starting in July of 2024 that continued through the early part of 2025, as there seems to be some question as to how the shortage started and even to this day why rice prices remain higher than normal.

As rice is such an important staple for Japanese families and households you would think the government would have used some kind of price controls to reel in the continued increase of rice prices but for whatever reason, they let the market decide the price of rice.

While its good that the provisional tax prices ended, other concerns continue as again, Japan is an energy resource-poor country and has to import much of what it needs which means its subject to the continued fluctuations of global energy prices around the world.

Consumers in Japan continues to grapple with inflation and or course unfortunately the lower-income groups suffer the most as they have to budget or watch every yen they need to spend and of course they probably cut back on many things due to the continued increase in inflation.

It's very good that the Japanese government is going to help wholesalers as Japan is very good at helping all sectors in the economy, as it usually has a structure that tries to benefit all somewhat like what the EU does or the Northern European countries do.

And yes, unfortunately, Japan is highly dependent on oil imports from the Middle East and even more than some other regions or countries in the world.

And yes, many other products and manufacturers are being challenged now with the Middle East situation, and its a good example of how interconnected all countries are now with whatever is going on or happening around the world.

Estimates suggest that when it does end, it could take months for the situation to settle down as supply chains will take a long time to get back to some kind of normal or at least a new normal.

The weak yen is both a positive and a negative which is both good and not so good for the Japanese economy. The weak yen, as a positive means Japanese companies that export and sell their products overseas they can get more for their products when the yen is weak.

As far as being a negative a weak yen means import will be higher and importers will have to pay more for whatever they are bringing into Japan which of course means they are going to pass-on their increased imports costs to the next in the supply chain and usually the final retail customer.

Yes, even globally, the price of many products are beginning to increase and it has been suggested price increases could last up to six months as it might take that long for the supply chains to get back to come kind of normalcy.

The challenge or problem is companies will continue to keep their prices until they feel they have re-couped any losses during or after the Middle East situation, and customers will need to brace for the continued costs or find alternative products.

The Bank of Japan, being a very conservative economics organization is not going to make any rash or quick decisions and most likely, as it usually does, will decide not to increase the rate due to the Middle East situation, the continued inflation situation, and the overall state of the Japanese economy at this time.

Yes, that is what is going to most likely happen, and if there was any sense of rate increase the markets already and even global markets would have shown some kind of reaction too, as all financial markets, these days are all closely inter-connected. 

Inflation in Japan is still not where the BOJ wants it to be and it might take some time for it to get back to below 2 percent which is where most central banks want inflation to be at as most central banks feel an inflation rate at or just below 2 percent is a manageable level for an economy.

Yes the index might be viewed as a precursor to a further rate hike but with the continued situation in the Middle East most likely the BOJ is going to stand pat and not increase the rate as global prices are going to remain high for some time due to various supply chain challenges which is going to effect all countries and especially Japan as Japan, being a resource-poor country, potentially could see prices continue to remain higher than usual.

Have a nice day!

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

Article to be deleted after ideas.

Article:

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

Article to be deleted after ideas:

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

Article to be deleted after ideas.

Article:

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

Japan Feb. machinery orders: Updated April 21, 2026.

Japan's Feb. machinery orders jump 13.6% on month

Ideas

Japan's core private-sector machinery orders might not sound like an important sector to be concerned about but it shows just how much the Japanese economy is moving forward and or just standing still.

Tracking machinery orders in the private sector just shows how much companies feel about the economy by spending on capital investments compared to not spending which doesn't help the economy grow.

Yes, its quite possible that corporate sentiment, similar to consumer sentiment, might actually be increasing as companies might see and feel the future is getting better and not worse.

But we've seen this before as we see a quarter or two of good corporate spending and then after that its back to being a little more stagnant, the usual pattern in the Japanese economy.

But it's a little too early to celebrate, as again, spending in the Japanese economy is both up and down and never that consistent over a long time period.

Not to be too pessimistic but sometimes data is intentionally omitted, a little, to make sure the financial markets are not completely upset with the results.

The Stock market and the financial markets tend to react to every economic or financial type  of news whether domestic or global or both.

As a result the powers to be that edit and examine the data each month or each quarter will sometimes, as needed, will amend the results as the have new data for the situation.

Again, the Japanese economy is very complex economy like all other economies and all sectors don't increase or decrease at the same time, depending on supply and demand, depending on supply chain situations, and a host of other situations sometimes that the companies in specific sectors can't control.

And even public sectors are prone to ups and downs as sometimes they increase due to political actions and sometimes the decrease due to political actions too.

Have a nice day!

Article source:   https://mainichi.jp/english/articles/20260415/p2g/00m/0bu/025000c

Japan Real Wages in Feb. Updated April 9, 2026.

Japan's real wages rise for 2nd straight month in February with 1.9% growth

Ideas

Real wages in Japan seem to finally see some daylight after months or years being less that inflation and an increase of 1.9 percent, while not much, is a welcome increase for many Japanese households.

Japan has been hit by constant price increases as Japan is a resource-poor country and needs to import much of what it needs and is subject to the whims of global price increases. 

Wage increases, while good but not great, have also helped but companies need to do more its been suggested that many of the name-brand companies are sitting piles of cash which could be used to help with the daily lives of their employees in Japan.

Nominal wages really don't mean much as they give a false sense of an increase but in reality real wages, disposable income, and the purchasing power of Japanese consumers is what really matters in the economy and the daily lives of ordinary Japanese citizens.

If you ask the average Japanese consumer what are nominal wages and of course they probably won't know or even care as global consumers would probably say the same thing, as what really matters is the amount of disposable income they have and the purchasing they have each week and each month.

Yes, despite all of the news about nominal wages, real wages, inflation increases or decreases is good and needed by some in business and government but most consumers could care less about all the stats thrown around in the media, as what they care about is their purchasing power and again how much disposable income they have left on Friday or Saturday or at the end of the month.

While a 1.4 percent increase in consumers prices is maybe beginning to show a decreasing trend, it might still be too high for the most vulnerable in Japanese society as maybe it is still affecting the lower-income groups, the fixed income groups, and of course the single mother who has to take care of her two children and only a contract salary or wage with no real benefits.

Japan is not an isolated island country or economy as, like all countries these days, it is highly interconnected to the rest of the world and what happens in the Middle East easily affects Japan just like the situation in the Ukraine has significantly affected raw material supplies and prices from that region.

Yes, private consumption or consumer spending is estimated to be about half of Japan's gross domestic product, but in reality it might be a little less in actual spending as in recent years consumer spending in Japan just hasn't been enough to significantly help the Japanese economy grow that much as maybe it should be around 55 or even 60 percent of GDP to see any sustainable real growth each year.

The Bank of Japan or BOJ is watching very carefully what is happening in Japan and the Middle East with of course energy and oil prices as Japan has to import much if not all of its energy needs which could be factor in the BOJ's decision to increase rates or keep them where they are now.

And yes, again, the BOJ is watching the wage talk increases as it appears some or many companies have actually met the demand of their labor unions, but as usual, while the large-name brand companies are doing their part, it remains to be seen just what the small and mid-size companies are doing or what can they really do.

It is estimated that up to 70 percent of the Japanese work-force works for small and mid-size companies and not the large name-brand companies that get all the news.

Most if not all small and mid-size companies just don't have the needed resources to match what the large companies can do and such the wage increases by the smaller companies are never going to be as much as a large company wage increases.

While any wage increase is good and needed, what is really important is what does the average Japanese worker feel about their wage increase? Japanese households, Japanese consumers have to got feel good about the wage increases and they have to be able to see it in their disposable income and their purchasing power at the end of the month, and if they don't see it or feel it they are not going to spend enough to increase or help economic growth in the economy.

And of course again, using the phrase the "the least among us" what does it do for the dis-advantaged in Japanese society? Do the wage increases reach the lower-income groups, the fixed income groups, and again do the wage increases help the single mother on a limited contract able to take care of her two children with no real health or medical benefits.

Have a nice day!

© 2026 Tom Metts,  all rights reserved

Article source:  https://mainichi.jp/english/articles/20260408/p2g/00m/0bu/022000c

Japan Feb. Current Account. Updated April 12, 2026

 

Japan logs current account surplus of 3.93 tril. yen in February

Ideas:

Japan seems to pay very close attention to its current account more that other economies, as Japan is still heavily influenced by being an export economic despite having a relatively strong domestic economy.

A decrease of 0.1 percent is really not that significant as the margin of error in the stats could be more than that, so it might be slightly positive and or slightly more negative.

Yes, the exact affects of the Mid-East situation might not be known or seen until the March numbers come out, as even then its really hard do gauge exactly how much its going to really affect the world economy.

The problem or challenge is companies, whether good or not so good, want to protect their profit margins from immediate and or future disruptions, so they will sometimes increase prices as they think there is going to be some kind of disruption in the supply and demand of their products.

There are positives and negatives related to the weak yen, such a weak yen increases primary income and also increases the price of Japanese exports which helps Japanese export companies bring in more yen too at the same time.

However, there are negatives related to the weak yen to as a weak yen, increases the price of imports into Japan as wholesalers and importers have to pay more for anything imported and of course they pass-on the increased import prices even to the final retail customer.

Japan is a significant export economy as its economy is basically always focused on exports even though it still has a relatively robust domestic economy with 125 million people.

At the same time, as a so-called island nation, it has to import much if not it needs and because of global prices being somewhat volatile at times, it's subject to the whims of global prices.

Trade with China, sometimes can be tricky as the diplomatic tensions between the two countries are not so good at this time, as evidenced by the significant drop in tourists from China due to the Chinese government cautioning Chinese from going to Japan which essentially is like an order not to go.

But at the same, even though businesses in China might have stopped or slowed down due to the Lunar New Year holidays, and the diplomatic tensions, trade still goes on between the two countries.

Most likely, as just suggested, the significant drop in Chinese tourists, which used to get larger tourist group to enter Japan caused Japan's services trade numbers to drop.

Foreign tourists entering Japan is considered an export as foreign tourists spend money in Japan. as they buy things but use foreign currency that they bring into the country including using credit cards from other countries.

Yes the number of foreign tourists from other countries has been very robust and may continue to be that way for a very long time.

At the same time, as suggested, again, in other articles, some in Japan are complaining that foreign tourists are not keeping manners and or making too much noise during the cherry blossom viewing season which is now taking place in most of Japan.

There can be both positives and negatives to foreign tourists visiting a country as the majority of foreign tourists will be polite but there also some who are not so polite and as usual they always get most of the attention.

But in Japan, to be fair, some of the local population ether just don't want foreign tourists in their country and or expect tourists to be able to follow all of the unspoken rules in a society at a foreign might not know about.

But the problem or challenge, which some don't seem to think about, is tourism is a very fragile industry and can easily go in the opposite direction with tourists deciding other countries seem to be more welcoming to foreigners.

Japan needs to be aware of this as sometimes some in a society can get a little arrogant thinking they are just a little better than others and they don't seem to appreciate or be grateful for all the money being spent in their country by foreigners when a foreign tourist an easily just go to another country and spend their money.

Have a nice day!

© 2026 Tom Metts,  all rights reserved

Article source:  https://mainichi.jp/english/articles/20260408/p2g/00m/0bu/026000c