Japan Govt. Spending: Ideas Later. Updated Jan. 5, 2026

Uncontrolled gov't spending creating risk of Japan interest rate surge

Article source: https://mainichi.jp/english/articles/20251217/p2g/00m/0bu/034000c

Ideas

Japan has fallen into the trap, unfortunately like other countries, of spending more and more as a way to solve their economic problems. Maynard Keynes, the father of spending to improve economies, never wanted spending to be long term considered it a short-term tool to help an economy improve.

But Japan, whether positive or negative, has turned government spending into an art form, as they have included numerous ways to spend on many things not important for the Japanese economy.

Not when they really need to spend to help Japanese households and Japanese businesses they have one of the highest, if not the highest debt to GDP ratio among advanced economies in the world.

Not knowing everything exactly about the Prime Minster and her goals, she is going to do whatever is needed to help the Japanese economy grow, which may or may not include a sizable amount of government spending.

Japan's fiscal health has been a challenge for a very long time, maybe decades, but to be fair, its seems like, as this time that the Japanese economy is still a very stable economy even though it might a stagnant economy that needs some government injections to get it moving again.

A rate increase by the back of Japan, can be both a positive and a negative, depending if you are a Japanese exporter or a Japanese importer, or a Japanese household or a Japanese small company.

What might be good for some in the economy might not be so good for others in the economy as an economy has many sectors and they all don't respond the same way to what the Bank of Japan does or what government spending does.

An increase in the key rate by a central bank is a strategy used to lower inflation as businesses will borrow less, consumers will use their credit cards less, and potential homeowners will not borrow for a new home as all if helps or supposed to help lower the inflation rate in an economy.

Deflation has been a major challenge for the Japanese economy of a long time, There again, there are positives and negatives to deflation, as lower prices of course help consumers but hurt businesses and the potentially they can't grow, can't increase wages, can't spend as needed on capital improvements.

An economy is a very complex puzzle as might be needed to help one part of an economy could help another part of an economy, as is the case with Japan, as a weak Japanese yen helps Japanese exporters but hurt Japanese importers. And as prices in the domestic economy continue to increase due to the weak yen, companies might be passing on their costs to the next in the supply chain including the final retail customer.

And then there is the idea of wage increases by companies due to the supposed labor shortage, as Japanese workers know they can get a higher wage if they look around and companies who need workers or need to keep workers have increase wages. 

And then those same companies will increase prices to pay for the wage increases so prices in Japan continue to increase for consumers, which all has a domino affect with wages increasing prices, increasing, and inflation continuing in the Japanese economy.

Its difficult to determine if deflation is really over in Japan as most likely some or many companies are still lowering prices on some products due to low consumer demand, even though there is evidence of inflation due to companies passing-on their costs to the next in the supply chain.

Yes the economic environment has definitely changed in Japan from 19 years ago when prices seemed reasonable for the average Japanese consumer.

Back then even hotel prices were reasonable and tourists could easily stay for a week in a Japanese hotel and the hotel price wouldn't kill their budget, and still leave them with enough income for shopping and dining out.

The Bank of Japan is very conservative and the one thing they don't want to do is upset the financial markets, domestically or even globally, and at the same time they don't want to do any harm to the Japanese economy. With that they might not increase the key rate if they think it's going to cause too many problems.

But then again, who knows exactly what is going to happen with the Japanese government, but again, the new Prime Minister is a fiscal dove, which means she might want to see the key rate a little lower and not a little higher, and also she might want to see more government spending to help the economy.

For the most part, the blog doesn't comment on issues related to investing in the stock market or even investing in bonds as this is not an investor related blog.

But yes, while many country's bonds are owned externally in Japan most bonds are owned internally not like in Greece in 2010 or in Britain recently. As a result Japan is not going to suffer of the same situations that both Greece did or even Britain did.

While not a good idea, the Bank of Japan can always print more money and or issue more bonds as needed to help the Japanese economy.

Yes sell-offs can be a risky situation as, while not the best example, just see some of the  movies related to the 2008 global financial crisis where there were sell-offs on wall street.

The same can happen to countries too but countries can control the situation much better than companies even though the Greece 2010 situation was handled very badly.

And yes the Japan debt to GDP is the highest among advanced economies, in the near future there doesn't seem to be any significant risk at this time. That doesn't mean there is not going to be risk in the future as Japan is an ageing society and is not really trying to improve its immigration situation to bring in more workers to pay into the social security or pension system in Japan.

The challenge for the Japanese economy, unfortunately, has always been the small and mid-size companies and just how much they can handle related to increase in the interest rate when they need loans to get raw materials or even pay wages for their workers.

And then there is the supposed labor shortage in Japan which is affecting small companies the most as their profits margins are not able to handle even small increases in wages. As a result some or many small Japanese companies can't afford to increase their wages to either attract new workers or even keep their current workers.

Corporate sentiment related to Japanese companies is always an up and down situation as they recently have been more pessimistic than optimistic due to the US tariff situation.

Yes, Japan's key interest rate is way below what other central banks are at now, and it could be the main reason why the Japanese yen is very weak at this timed, which is causing havoc with the Japanese domestic economy but at the same time helping Japanese exports companies with more profits.

Japan's fiscal health has always been challenge for the Bank of Japan and the Japanese government but they needed to prioritize what is most important and trying find strategies and solutions to help the overall Japanese economy seems to be its more important priority at this time.

The Japanese economy is a very stable economy and is in no position to default on its loans or even bonds purchases, as most of it not all of the bonds are owned internally and not owned by those outside of Japan, for the most part.

The Bank of Japan is well aware of the situation and will not allow the key yield increase to 2.5 percent as they have enough tools needed to keep the situation stable without losing control of the situation.

With that being sad, there is always the possibility, at least in the short-term they might allow the rate in reach 2.5 percent but only if they know it can help the Japanese economy and maybe reduce inflation at the same time.

Semiconductors and shipbuilding in Japan used to be two sectors that could have been considered economic drivers of the Japanese economy but both sector have lost significant market share to Taiwan and South Korea related to semiconductors and both China and South Korea in shipbuilding.

Its way to early to determine at this time if Japan can really regain any market share in the two sectors as its going to take a significant investment over many years to re-energize those sectors.

A the same time, many of the past Japanese governments and Prime Ministers have tried repeatedly to improve the Japanese economy with significant subsidies or cash handouts, which might have worked in the short-term but didn't do much in the long-term for the Japanese economy.

Back when the last Abe was Prime Minister the Japanese government increased the retail sales tax from 5 percent to 8 percent as away to start to pay-off the government debt, but it seemed to fail and Japanese consumers didn't buy as much but over-time, as with any consumers in any economy they got use to the new sales sales and spending went back to normal.

The Japanese government in 2019 did the same thing by increasing the sales tax from 8 percent to 10 percent and again the same thing happened with consumer spending decreasing for a time and then again back to normal as consumers got used to the new sales tax.

So whatever the new Japanese government is going to do to try and reduce the debt they need to be aware how its going affect Japanese consumers even more importantly how its going to affect the low-income groups including the fixed income groups.

Have a nice day!

Japan Trade Surplus: Updated Dec. 17, 2025.

Japan logs 1st trade surplus in 5 months in Nov., US exports rebound

Article source: https://mainichi.jp/english/articles/20251217/p2g/00m/0bu/016000c

Ideas

The US is an important export market for Japanese companies but they can't just focus on the US as things can always change and change quickly. But while things are good, Japanese companies should keep exporting to the US.

Most likely the US tariff situation is not affecting Japanese companies as much as was expected but it's really too early to tell just yet, as the tariff rate didn't go into effect until Sept.

Japan is smart to diversify its exports and not just focus on the US and there is a huge market in Asia that is more than willing to take Japanese exports.

Japan is a resource-poor country which means it has to import much of that it needs while the European Union hasn't been the best economically recently but its still a large market to get imports from.

Despite the US tariff situation Japanese exports are still in high demand as yes, maybe the tariff situation is either receding some or hasn't really affected exports form Japan yet.

But to be cautious. its possible Japanese export companies are absorbing the US tariffs and who knows how long that will last as the tariffs are a costs that weakens a company's profit margin and eventually they could begin to pass-on the costs to the next in the supply and even the final US customer.

The US economy rarely has a trade surplus as it usually has a trade deficit as it imports more than it exports, but Japan is an exception as Japan exports more to the US than the US exports to Japan, as many companies, globally, want to do business in the US because of its huge consumer spending base.

But Japanese companies can never take anything for granted with what is happening in the US now as things can change very quickly as the tariff situation could be increased for no apparent reason.

Japanese car companies for a while were exporting less expensive cars to the US as a strategy to offset the tariff situation, but it seems now, as demand has not decreased, that many the higher end Japanese cars are back on the market in the US.

China right now is a serious challenge for Japanese businesses and the Chinese economy is not where it was before the pandemic and it doesn't seem to be improving that much.

There is also the Chinese tourist situation which has changed significantly ever since the Japanese government said something that China didn't like which seems to happen every few years.

Chinese tourists, which at one time were the largest foreign tourist group going to Japan has receded significantly after the Chinese government cautioned Chinese citizens from going to Japan, which in effect is like an order from the Chinese government.

Have a nice day!

Japan Extra Budget: Updated Dec. 22, 2025.

Japan Diet enacts 18 tril. yen extra budget for PM's expansionary stimulus

Article source:  https://mainichi.jp/english/articles/20251216/p2g/00m/0na/035000c

Ideas:

Japan has tried many times, with other supplementary budgets to try and improve the Japanese economy with not much success. This is no guarantee that the new budget, other than increasing the government debt,will have any effect on the economy.

Japan has many economic structural problems besides the inflation situation which is constraining the Japanese economy. Until Japan addresses the structural challenges the economy is going to be stuck in first or at best second gear and not growing much at all.

like any bill and drafts of a bill it probably went through many revisions as a bill rarely gets passed as it is but due to political tensions there are always going to be some or many changes before its passed.

The Japanese government knows full well that is debt to GDP ratio is the highest in the world but it has to decide what is most important, reducing the government debt or finding ways to  help the economy, even if that means spending more and increasing the debt.

Many bills always include some parts that the leading party didn't need to want but they need help from other parties to pass the bill so they include parts that other parties want and need in the bill.

Again, despite the new Prime Ministers best attempts to find ways to improve the economy,  past Prime Ministers, with good intentions, just couldn't improve the Japanese economy with their new bills or new budgets.

The new Prime Ministers ideas are good and needed but again there is no guarantee that the new bill will do anything but increase the debt. Yes, there might be some improved business confidence and maybe some improved consumer confidence but can it be sustained in the long run to get the economy moving again.

Trying get a decrease in living costs for Japanese families might be out the control of the Japanese government other than giving handouts and subsidies which are at best short-term solutions to solving the challenges related to the Japanese economy.

Yes, Japan fiscal situation is not the best and is the worst among the Group of Seven economies, might be the worst among the G 20 economies and is probably the worst among OECD economies.

But the Japanese government has to decide what is the most important challenge at the present time, improving the lives of Japanese families or trying to reduce the current debt situation.

The selling of government bonds seems to be a common strategy of the Japanese government, and maybe globally many governments do it when they need more money to finance whatever they need.

Of course selling government bonds might work in the short-term but again it increases the overall debt of a government, but in this case maybe the Japanese government feels it has no choice but to increase the debt to get money for the relief steps of subsidies and cash handouts in the new budget bill for Japanese families.

Just what is a crisis management situation that a government needs 6.4 trillion yen again as is its going to increase the debt and will the 6.4 trillion yen actually do what it's intended to do.

Not to keep commenting on the same thing, but past Japanese governments too has significant supplementary budget bills to improve the Japanese economy and the lives of Japanese families but most helped in the short-term but in the long-term didn't do much to help.

Japan seems to be more concerned with China these days and feels it needs to increase its defense budget as a way to offset China's defense spending.

And at the same time appease the current US government has been pressuring the Japanese government to increase its defense budget.

As always opposition lawmakers rarely like a bill that is passed or intended to be passed unless it has something in it for them. And then there is the budget measures that are not the most important and maybe could wait until the new fiscal year in April to be implemented into a new bill.

But what is urgent or needed, it seems, its the need for relief measure to help Japanese families with cash handouts and subsidies related to electricity and gas which again might help in the short-term but in the long-term might not help much at all.

Have a nice day!

Japan Current Account: Updated Dec. 20, 2025.

Japan logs record current account surplus for October, up 15.5%

Article source: https://mainichi.jp/english/articles/20251208/p2g/00m/0bu/009000c

Ideas

It's worth noting that Japan seems to pay close attention to its current account, maybe more than other countries where it's probably not in the news everyday or every month. 

A economies current account is like an economies bank account with exports, foreign investments, and foreign tourist spending bring money into the current account while import take money out of the current account.

The higher return on investments most likely are related to the weak Japan yen, which ups the value of both exports and investments outside of Japan.

Good trades, meaning products made in Japan and exported to other countries, is back-bone of Japan exports including the Japanese car industry which is most likely the sole economic driver at this time for the Japanese economy.

Japanese exports might have seen a decrease as most likely the US tariff situation could have cause a disturbance in the flow of Japanese exports to the US while of course Japan exporting to other countries continued on as usual.

Again the increase in investment and primary income most likely was a result of the weak Japanese yen, which increases the value of income and investments overseas for Japanese investors.

There could be many reasons for the decline in the good trade a year earlier as always everything depends on supply and demand with international trade. 

Japan continues to depend on exports and trade for its economic growth as that is how it built its economy after WW11. While it a very good strategy for some of the economy it might not be a sustainable model for the domestic economy as the Japanese domestic economy is not growing as much and or there just doesn't seem be real economic drivers to help the domestic economy grow.

Japan used to be a significant semiconductor powerhouse and had a large share of the semiconductor market at one time. But it has been passed up by both Taiwan and South Korea  and now is just a shadow of itself former self and the same can be said for Japanese shipbuilding which also too has been passed up by China and South Korea. 

Japan has shifted from semiconductor chips to semiconductor-related components where is has a significant advantage in these days.

But then there is the services deficit where Japan is far behind other countries related to the production of smartphones and computer information services. The reason is Japan continues to focus on hardware and is way behind other countries like the US which is focuses more on software other than the US producing the I phone with is a major hit in Japan over its own smartphones, as a result Japan has to import much of the software it needs from other countries.

Its interesting, despite the weak Japanese yen, which means Japanese citizens traveling and spending money in foreign countries have less purchasing power. But most likely Japanese citizens are buying and or stocking up on US or Euro dollars before they take their trips overseas which means they have enough to use without using Japanese yen or maybe even Japanese credit cards.

But its no doubt the travel surplus continues to remain in the surplus range as the weak Japanese yen gives foreign tourists in Japan more purchasing power so they can buy more in Japan while they are there.

The only real challenge is the number of Chinese tourists have probably decreased significantly as the Chinese government has suggested to Chinese travelers to stay away from Japan, due to some unwise remarks made in Japan, which in essence is a ban for Chinese tourists traveling to Japan.

Have a nice day!

Japan July - Sept. GDP: Updated Dec. 21, 2025.

Japan July-Sept. GDP revised down, first drop in 6 qtrs on weak investment

Article source: https://mainichi.jp/english/articles/20251208/p2g/00m/0bu/019000c

Ideas

The Japanese economy hasn't been that great for a very long time and rarely grows more than 1 percent if even that. And then with the US tariff situation in play it's not a surprise that the economy decreased during the July-Sept. period.

Companies in Japan need to see something positive before they are going to investment or spend their money and again, with tariff situation, they  are not going to invest or spend much until see something good happening in the future.

This easily could be written off as just a business cycle situation where there are good periods and there are not so good periods for an economy. Yes, this might be a not so good period but, while the Japanese economy might have grown somewhat over the previous six quarters, that doesn't mean one not so good quarter is going to cause everything to look like gloom and doom. Things can change quickly as the Japanese economy is a very resilient economy and always finds a way to find some growth over time.

The tariff situation is an opportunity to show how innovative and creative Japanese businesses can be and find new strategies to overcome the situation. But unfortunately the Japanese business leaders of today are not the leaders of old that grew some of the most innovative companies in the world as the time, The group of business leaders in Japan are under extreme constraints that the early business leaders never faced.

Yes, the weak Japanese yen is causing import prices to be higher than normal and import companies and wholesalers pass-on the higher import prices to the next in the supply chain including the final retail customer.

Private spending or consumer spending and business investments are other keys to GDP growth and if they are down too then it depends on either exports or government spending to increase economic growth in Japan.

An increase in interest rates can be both a positive and a negative just like a decrease in interest rates can also be a positive and negative. If there is an increase in interest rates, that might be a positive for banks in Japan as they can finally increase the rate on lending for loans to businesses and individual consumers.

But its also a negative for borrowers and they have to deal with higher loan rates and businesses, and especially small business who needs loans more than large businesses and could potentially drive them out of business.

And at the same time is good for those who have savings accounts in banks as they can get a higher return on the savings. So it's both a positive and a negative for an economy,

The Bank of Japan has to decide how much to increase the rate and just how much the rate can help the economy or hurt the economy. Traditionally whenever a central bank increases the key rate, it is assumed or expected that the rate increase can and will begin to lower inflation in an economy.

Yes, domestic demand could be affected and could decrease, but the challenge is domestic demand or consumer hasn't been that great lately as inflation has dampened consumer disposable income and with the rate increase it could cause it to be even worse, as least temporarily.

The Japanese economy never grows that much as Japan is a mature economy, which means economic growth is never again going to be like China or an emerging economy. As, again, it might reach 1 percent if even that for most years or quarters.

Not to be negative but there are constraints on the Japanese economy such as it being an ageing society which means it has a significant population that doesn't spend as much as this needed for economic growth.

And then there is the innovation situation which is greatly needed in Japan now as companies, unfortunately are not just innovating fast enough to improve economic growth.

Yes, AI might be moving into Japan, like it is globally, but Japan seems to be behind the times, expect for the in the area of robotics and semiconductor equipment manufacturing.

And finally there is productive, which to be fair to Japanese companies, is hard to really measure, but it seems, based on the latest metrics Japan is way behind in the productivity zone, which constraints economic growth.

Capital spending is very important for the Japanese economy, whether positive or negative, Japan is still heavily focused on manufacturing which depends a lot on capital or business spending to keep its economy moving forward. And when it decreases the economy decreases. 

Yes, Japan has moved more into a service and technology related economy but its focus is still manufacturing as it sometimes thinks it's still the 1980's when manufacturing in Japan was king.

Private consumption or consumer spending is not that great in Japan and hasn't been that great except during the roaring 80's then the Japanese economy was booming. Consumer spending might be half of GDP in Japan, but for sustainable economic growth it potentially should be around 60 percent, which might never happen, as Japan is an ageing society which means some or a lot of its population just doesn't spend enough to improve economic growth.

And yes, inflation is more of a challenge as it reduces the disposable income of Japanese consumers which is needed to improve spending in the economy and get the economy moving forward.

For the most part exports in Japan have been the key economic driver while the rest of the ingredients needed for economic growth has been less than good recently. And with exports down, due mainly to the US tariff situation, they might not get back to normal for a few more quarters.

Japan is a resource-poor country, which means it has to import much of what is needs and when the yen is weak as its been recently at least since the pandemic, import prices will be higher than normal which means consumers in Japan have to pay if importers and companies pass-on their increased prices to the next in the supply chain including the final retail customer.

Housing costs have been increasing recently which of course many potential home owners are either going to wait and or rent until housing prices decrease. The problem is, if the BOJ increases the key rate, loans for new home owners and existing home owners are going to be even higher in the future.

The increase in housing costs is also related to the weak Japanese yen, as again, Japan has to import much or what it needs which again, means importers are going to pass-on their increase costs to the next in the supply chain again means potential home owners are going to have to pay more for their new home or even home re-furnishings or even home repairs.

Japan is very strategic and always finds a way to negotiate in its best interest and this might have been a good example as the US tariff rate was reduced significantly.

And there is the idea of Japanese investment in the US, which many Japanese companies might have been thinking doing all along even before the tariff situation so it really wasn't a  win for the US as it must just might have been business as usual for the Japan.

As far as US products are concerned, Japan importers can try to import US products into Japan but it depends on Japanese consumers if they want to buy them, and as history have shown, Japanese consumers just aren't interested in some US products as they are not up to the standard for products that Japanese consumers want. 

For example, again, Japan importers can try to import US cars but just aren't up to the standard or quality that Japanese consumers want and need. And most US cars are just too big for the type of roads that Japan has which is why Japan has a lot of mini-vans or small economical cars which fit Japanese roads and the Japanese lifestyle. 

Yes, the economist is correct it saying Japan may temporarily return to growth but you never know exactly as a lot depends on how demand in the US develops as US consumers are struggling to afford many things these days and could affect the demand for Japanese products in the future.

Housing investments at times can be very cyclical as potential home owners don't always buy a new home every day or even every month as like potential care buyers is very much a cyclical buy and its not like going to local supermarket everyday. It would get back to normal soon or maybe not it could take a few months before the housing construction investments are smoothed over.

Yes, its seems like the Bank of Japan is finally going to increase its key rate, but that doesn't mean inflating will automatically decrease as it could take several months or more to see any real decrease in the inflation rate.

And there is the possibility that nothing is a really going to change if the BOJ does increase the rate, as the Japanese economy, being as weak as some say it is, could take a nose-dive and GDP could decrease even more or at least temporarily before it begins to improve again.

The most important indicators, which is probably what the BOJ is concerned with is inflation and with that the BOJ most likely is going to increase the key rate to try and reduce inflation.

As the new Prime Minister is a key advocate of economic growth and finding ways to help the economy grow as a key rate increase, at least temporarily, might be in-line with what the Japanese government wants and needs to curb inflation in Japan but not what the government eventually want in the long run. 

And again, the Japanese economy just doesn't grow that much but also doesn't contract that much too, as a decrease of 0.2 percent it about normal when it does contract and when it does grow it might be a 0.2 percent increase.

Have a nice day!

Japan Bankruptcies: Updated Dec. 17, 2025.

Japan bankruptcies likely to surpass 10,000 in 2025 for 2nd straight year

Article source: https://mainichi.jp/english/articles/20251208/p2g/00m/0bu/026000c

Ideas
There are two ways to looks at the corporate bankruptcies in Japan. One might be that bankruptcies are a normal part of the market system where supply and demand determines which companies survive and which companies go out of business.

The other way to look at the bankruptcy situation in Japan is companies are made up of people and Japanese households and people are losing their jobs and putting people out of work. Yes, they might get unemployment benefits, but in most countries outside of the Northern European countries don't pay enough unemployment benefits.

There are also some possibilities for the increase in corporate bankruptcies such the continued inflation situation in Japan, the continued increase in raw material costs, the continued labor shortage in Japan which might be affecting small and mid-size companies more than large name-brand companies which probably have enough resources overcome all of the negative factors.

Small businesses and in particular maybe service type of companies have few resources and thinner profits margins than larger companies or even mid-size companies. As inflation continues it takes its toll on small companies and as wages increase in Japan, small companies can't pay the wages that their current staff wants and needs and they can't pay the wages that new workers might want, so they not only lose worker, who go to other companies, but they can't hire new workers for their companies.

Yes, as suggested, as suggested the services sector has very thin profits margins and any increase in raw material prices and or wage increase expectations places a service company under a lot of stress and as again as wages increase and raw material prices increase it compounds for time, and eventually companies just go out of business since they can't do anything to solve the situation.

But then again, some might say this is part of the normal business cycle where some companies thrive and some companies just don't make it. And then there is the idea of maybe just too many companies in a specific market and the bankruptcies is leveling out the market to where there is more equilibrium in the market and prices can get back to some kind of normalcy.

Yes the weak Japanese yen might have something to do with the bankruptcies as the weak Japanese yen increases the price of imports, which are then passed-on by importers and wholesalers to the next in the supply chain and in this case small companies which can't control what they need to buy, or can't find substitutes, which have increased prices too, and then of course the final retail customer.

Japan is very much a resource-poor country and has to import much of what it needs including the raw materials needed to make food products in Japan. 

Whatever the reason for the bankruptcies they unfortunately affect Japanese households and families and whatever the Japanese government can do to help these unfortunate families is needed here.

Have a nice day!

Japan Real Wages Decrease: Updated Dec. 9, 2025.

Japan's real wages fall 0.7% in October, down for 10th straight month

Article source: https://mainichi.jp/english/articles/20251208/p2g/00m/0bu/003000c

Ideas:

 Real wages are very important for households and consumers as they are a key indicator of purchasing power and how much consumers really have to spend.

For Japanese households real wages have been steadily decreasing which means their disposable income was/is getting less each month.

Most likely, as Japan is facing a critical labor shortage less part-time workers are being hired in favor of more full-time workers in Japan.

Nominal wages are not whats important for consumers as nominal wages just show how much inflation has increased or decreased relative to wages.

Again, real wages are the most important indicator as it shows how much real purchasing power consumers have in an economy.

As the article suggests nominal wages have increased for 46 straight months which means inflation has steadily increased in Japan since the pandemic.

A 3.4 percent increase in food costs is not good for most Japanese households and its especially not good for the low-income and fixed income groups in Japan.

It means these groups might have to look for food substitutes that might not be as good or healthy as their normal food choices.

The 3.4 percent might also mean there is going to be less spending in the Japanese economy as Japanese households, consumers cut-back on their normal shopping patterns.

Bonuses in Japan are usually paid at the end of the normal year, in Nov. or Dec. and again in around May or June.

Wages in Japan are usually much lower than wages in the US so companies make up the difference, somewhat, with bonuses twice a year.

As inflation has been a constant in Japan almost since the pandemic it doesn't look like it's suddenly going to just stop and everything will be good for Japanese households.

The Bank of Japan is going to watch what is going to happen with the Japanese economy related to inflation, price increases related to food, energy cost increases, wage talks and companies, and of course the US tariff situation and how its affecting the Japanese economy.

Most likely, but just a guess, based on the past history of the BOJ, they are not going to make a decision that will cause harm to the economy and they will most likely take another wait and see approach.

If they do make a move it will just be a very minimal incremental rate increase which they think is not going cause much harm to the Japanese economy.

Have a nice day!