BOJ and Possible Rate Change. Updated May 30, 2026.

 

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

Ideas

The Bank of Japan, as expected decided to not increase the rate due to Middle East situation and the fact the BOJ is very conservative and doesn't want to cause harm to the Japanese economy with unwanted or unneeded side affect and or course doesn't want to upset the financial markets in Japan or globally.

And then there is the unspoken or understanding, whether good or not so good that the current Prime Minister is fiscal dove and would prefer to see the key interest rate to be decrease or less than it, which while not saying so directly, might be part of the BOJ's decision not to increase the key rate.

Inflation in Japan, almost since the pandemic has continued to increase which of course has put a lot of stress on Japanese households and forced them to cut-back on many things and or course reduce their spending in the economy.

The Japanese economy only estimated to grow 0.5 percent is not a surprise as a 1.0 percent projected growth might have been a little too optimistic as the Japanese economy just doesn't grow that much these days.

And the fact that three of the BOJ policy makers are somewhat hawkish just shows that there is never a consensus to do one thing and there are always some for and some against increasing the key rate to try and reduce inflation in the Japanese economy.

Increasing the key rate, has both positives and negatives as an increase can in theory be an incentive to reduce process but at the same time, if the inflation is due to companies passing-on their costs due to increased energy costs, increased labor costs, or increased raw materials costs, companies are going to be very reluctant to lower their prices even though Japanese households and or consumers have cut back on their spending.

If inflation is only due to an increase in consumer spending, then yes the increase in the key rate most likely will stem the increase in spending by consumers and might reduce the inflation rate some over time as needed.

Yes, potentially the increase in crude oil prices as for example both South Korea and Japan will be the most affected and their need for oil from that region is about 49 percent of their energy needs which means they are two most vulnerable countries affected by the Middle East situation now.

And as noted, due to global logistics systems now being very interconnected its not just energy but a host of other products and services that are being affected by the situation and it doesn't look like its going to end any time soon, which means both South Korea and Japan will continue to have challenges with their economies.

Companies whether good or not so good, usually these days don't wait until something happens to increase prices and they will be very proactive and increase as a way to try and protect their profits margins from future challenges and this is a perfect example of companies increasing prices ahead of any prices increases due to due logistics or energy companies increasing their prices. 

Again, both Japan and South Korea are the two most vulnerable countries as both are relatively resource-poor countries which means they have to import much of what they need including most if not all of their energy needs.

The BOJ, as expected likes to be positive and the ideas that inflation will be reduced to the target rate of 2.0 percent inflation might be true, but a lot can happen between now and the end of 2028, with all kinds of challenges, both domestic and globally, could disrupt the idea that inflation will actually be less than 2 percent in two years from now.

And again, while an GDP growth projection of 0.7 percent is about right but again its way to early to know just what is going to happen as again there are just too many variables both positives and negative and unfortunately, as least lately, the negatives have had more affect on the economy than the positives.

Core consumer prices may increase to 2.3 percent in fiscal 2007 but there is no real guarantee that they might increase more or less as inflation, again, has increased almost since the pandemic and has continued to increase each month and each year since then.

To be fair, BOJ watchers like to think the key interest rate is going to be increased in the coming months but the BOJ is a very conservative group even though some members are somewhat hawkish meaning they want to see a rate increase but so far the dovish type board members have been able to keep the rate stable or from not being increased but of course that could change but its hard say just yet as there are just too many variables, domestically and globally, that would upset any desire to increase the key rate.

The BOJ always vows to increase the rate but it rarely does as it knows there are just too many negative variables preventing them from doing it. And even this time, with the Middle East situation affecting most if not all economies, the BOJ just might be trying to keep the markets calm and not trying to upset them too much.

And yes, the yen might have increased some but it's still very weak which can be both a positive and negative depending which side of the coin you are on. as a weak yen helps exporters but hurts importers and ultimately hurts companies in Japan and Japanese consumers. 

And again, the BOJ and Ueda might have good intentions or the desire to increase the key rate to try and reduce inflation but due to the Middle East situation there are now just too many variables that could disrupt the Japanese economy with the increase in prices related to energy price increases, price increases of other products coming from the Middle East and disruptions in global shipping and logistics systems around the world.

Yes, cost-push which is essentially companies passing-on their increased costs to the next in the supply chain including the final retail customer is the main challenge now for the Japanese economy.

Wage increases which increases a company's profit margin is not the main factor, as for example it is estimate that only 30 percent of the Japanese workforce work for the large name-brand companies but instead work for the small and mid-size companies that makeup most of the economy and many of the small and mid-size companies just don't have the resources to increase wage as much as the large companies.

As far as domestic demand is concerned it is estimated that consumer spending is only about 50 percent of Japan's GDP which, in itself is just not enough to help the economy grow as it needs to be at least 60 percent of GDP to see real growth.

Also an key rate increase could potentially cool economic growth as there will just be too many side affects affecting the economy and the Japanese economy is just not strong or robust enough to handle key rate increase at this time, even inflation is well above the 2 percent target that the BOJ wants to see.

In recent days, here in late May, the Japanese yen has fallen even further which is some consider to be too weak and is not inline with the rest of the major currencies globally.

Yes, import prices, in resource poor Japan is going to be even higher than what importers or wholesalers want or need, which means they are going to pass-on their increased costs to the next in the supply chain including the final retail customer.

Japan most likely will follow the US Federal Reserve, which is to keep its rate steady and Japan will follow the same thing due the Middle East situation and the strait or Hormuz being still closed which means the flow of oil and products from the Middle East will be constraint for the time being.

Have a nice day!

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. Updated May 13, 2026.

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

Ideas

Japan, traditionally has been a high savings country similar to other Asian countries such a South Korea, and as such have not been big spending consumers like in the US.

So its not a surprise as inflation keeps a hold on Japan and now the Middle East situation with the increase in energy and oil prices that Japanese families are opting out of a big spending Golden Week this year.

Again its not a surprise and maybe its kind of trend that some families are opting out of taking vacation trips and redeciding to just stay home and save some money at the same time.

This has been happening in South Korea over the past five years or so but in a little different way. During Chuseok, the traditional Korean thanksgiving period, families would travel back to their hometowns outside of Seoul for the holidays. But in recent times, many families and individuals have opted to travel to other countries instead of going back to their hometowns.

But at the same time, even in South Korea many families also have decided not to travel back to their home towns due the that sometimes family gatherings can be vert stressful and or because of the long work hour culture in South Korea some have decided it best to just stay home a rest and not travel anywhere.

It seems the idea is to spend as little as possible and go to places that don't cost much or nothing at all, which the "zero yen" phrase means.

All of the numbers or figures listed indicate that maybe the average Japanese family or even individuals are not going to spend much or just don't have planned in their budgets to spend during the Golden Week period.

Yes, most likely, the high middle income group or even the even higher income groups are planning maybe to go overseas to places such as Europe or even Hawaii for their Golden Week period. Of course some might be thinking of going to South Korea, some might go to Vietnam, and some might even go to Thailand for their holiday period.

But the vast majority of families, due to the high inflation situation and the weak Japanese yen, have maybe prevent the average Japanese family from traveling overseas during the Golden Week period.

Again, its not a surprise that savings have increased in Japan as Japanese families and consumers have been less than willing to spend as their disposable incomes continue to decrease along with their purchasing power continues decreasing and as such they opt to save instead of spend.

Of course all those these figures, again, might represent the average Japanese household or consumer but maybe not the higher income groups who sometimes don't feel the same struggle that the average Japanese household feels.

While savings are very important for an economy but so is consumption or spending and there needs to be a balance between the two competing metrics. The problem is even thought there needs to be a balance, most of time, and probably in every economy, one tends to outshine the other as it takes an economy that is both robust and growing for both metrics to see equal growth at the same time.

The problem for Japan is its no longer a robust and growing economy but can be seen as a mature economy and unfortunately sometimes a stagnant economy which doesn't bode well for sustained consumer spending but might be good for those who need and want to save.

Have a nice day!

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

Japan Trade Deficit: Ideas later. Updated May 12, 2026.

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

Ideas

There was no way that Japan automakers could have realistically prevented or even expected the tariff situation. But now, as it is what it is, Japanese auto companies will need to readjust the profit expectations for the future.

As far as the trade deficit is in Japan now, Japan is like South Korea in many ways in that Japan seems to only rely on a few key exports to be economic drivers and hasn't really diversified it export portfolio enough that if auto exports are down, they can also rely on other exports to keep the trade balance in the surplus range.

Japan, due to the auto sector, used to have continuous trade surpluses but of course the pandemic or post pandemic period reduced it some, but now there seems to be many external variables in the global economy that is out of Japan's control.

Japan is a resource-poor country which means it has to import much of what it needs and as such as global prices continue to increase due to many variables out of Japan's control the value of import into Japan are going to continue to increase.

And of course as importers in Japan along with wholesalers have increased prices, they are no doubt going to pass-on the increase in prices to the next in the supply chain which of course will eventually mean the final retail customer.

The trade surplus/deficit situation is always changing depending on many external situations and not just related to the demand of products globally.

A country's current account, which surpluses and deficits are directly related, is like a country's bank account and its it has direct or indirect affect on the currency exchange rate and in this case the Japanese yen being weak or strong and for the past decade, maybe longer, the yen has been weak.

Japan, it seems. is back in the semiconductor market as for a long time it didn't seem to do much, as Taiwan as TSMC and South Korea, and Samsung and Hynix took over much of the global market the last few or even the last decade.

Unfortunately, it should not be a surprise that Japanese motor vehicle exports have declined and either companies such as Honda and Toyota might have decided to reduce production and shipments to the US due the tariff situation and or the the prices were increased in the US which didn't sit well with US consumers and and as consumers do they bought less Japanese cars.

And the powers to be in the US don't seem to understand the Japanese market that much as they think Japanese are going to buy US cars which they are not as US cars, as they are currently designed are too big for Japanese roads, and to be fair Japanese cars are made with the Japanese in mind and are specifically designed for what they Japanese want and need.

Car companies and most likely Japanese car companies operate on very thin profits margins or maybe 3 to 9 percent which means before the tariff situation as the tariff was at 2.5 percent car companies might have been able to get by with even slimmer profit margin. But now as the tariff is 15 percent that means most car companies in Japan are not able to keep within the margins that they need to remain profitable selling in the US. 

As such they probably have to pass-on the tariffs to the next in the supply chain which of course might include distributors in the US or even distributors will pass-on their increased costs the the final retail customer.

Global trade is a very fluid situation as there are many external global variables that can affect supply and demand and while Japan might have had a trade surplus, it can never be expected exactly to have a trade surplus every month, as again there just too many external global variables that can change the situation very quickly.

Japan is smart to look for other sources of energy and oil and not rely on one region of the world to get its energy or oil supply as again, supply chains to very vulnerable to many global external variables and can easily be disrupted month to month or even day to day as was seen during the pandemic and now the latest Middle East situation.

Global trade and supply chains, these days are so inter-connected and any small deviance can upset the balance and even very obscure products or commodities, not known to everyone can be affected as again any small or large ripple can have huge affects on global trade and supply chains as seen with the product related to Japan and their supposed imports.

And then there are all the Japanese companies, big, medium, and small that might rely on energy commodities from the Middle East and now might have to find alternative resources to continue to do business.

And of course Japanese export companies, that export to the Middle East have had disruptions in business which might mean their manufacturing schedules or output might have to be reduced which might mean less profits for the month or quarter which could not affect their company but many of the small and mid-size companies too that supply them in Japan.

Yes, most likely all countries are being affected by the situation in the Middle East and many of if not all supply chains are being significantly affected now and the global economy and most economies globally could see less economic growth as long as the situation remains to same.

 As oil prices increase many some or many countries might be reducing the gas tax in their respective countries and or even giving subsidies to oil companies to keep the prices reduced or at a minimum. 

But the US doesn't seem to be doing much as its just letting the gas price increase or decrease naturally which means the US consumer will have less disposable income due to increased gas prices.

Have a nice day!

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

Bank of Japan Possibilities: Updated May 8, 2026.

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

Ideas

The Bank of Japan is a very conservative central bank, like most central banks, and doesn't make rash decisions, so the BOJ to change what its done recently will be a big shift, but its not likely to happen and there are just to many factors that will most likely keep the rate unchanged.

There might be an upward revision of its inflation forecast for fiscal 2026, but most likely the forecast will not be that much of a surprise and inflation has either been increasing at a slow rate and or leveling off some the past year.

And there is not much really to say about the Japanese economy other than it might grow slightly but is all the growth the BOJ should expect in 2026.

Yes, the Middle East situation is hard to figure out at this time other than its affecting the price of energy and other commodities that Japan needs to import which means imports prices are increasing, which again means consumers are potentially going to pay more for many products in the future.

And yes, central banks are not sure what to about the Middle East situation other than take a wait and see approach and maybe try to wait it out and see if global prices are going to decrease and or stabilize in the future.

Many Japanese companies have finally, the past two years been increasing wages, due to the government urging them to finally make wages more doable against the continued inflation in Japan.

But the challenge is, many small and mid-size companies are not able to meet the increased wage needs that their employees want as their company profit margins are just to thin and can't really increase wages that much.

Again, the BOJ is not going to increase the rate unless it feels inflation is just out of control which is isn't at this time. It might more than the 2 percent that the BOJ wants to see but its still close to that mark at this time.

But the Middle East situation is most likely going to be the determinant factor as global energy and commodities prices might be too much and the BOJ will just take a wait and see approach and wait until May or the summer to make a definitive decision.

Have a nice day!

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