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Japan recorded a net sale of ¥524.3 billion in foreign investments in Japanese stocks, reversing the previous week’s inflow of ¥ 473.3 billion. This suggests a waning appetite among foreign investors for Japanese equities amid global risk rebalancing and profit-taking.

Meanwhile, foreign bond buying dropped significantly to ¥615.5 billion, down sharply from the prior ¥1.57 trillion. Although still positive, the lower bond inflows reflect reduced foreign participation in Japan’s fixed-income markets, possibly due to interest rate differentials and currency risk.

Together, the data signal a cooling in foreign capital inflows, which may weigh on near-term support for both the yen and Japanese asset prices.

Japan’s Coincident Indicator, which reflects current economic activity, rose 0.2% MoM in April — a modest rebound after a steep -1.4% decline in March, and stronger than the expected -0.3%. This suggests stabilization in ongoing economic output, particularly in industrial production and employment.

However, the Leading Index, which signals future economic trends, fell 3.4% MoM, after an even deeper 4.2% in the prior month. The index level dropped to 104.2, down from 108.1 in March, indicating growing concerns about Japan’s forward momentum, especially amid weak global demand and slowing exports.

Japan’s Corporate Services Price Index (CSPI) rose 3.3% year-over-year in May, slightly above expectations of 3.1% but just below the previous month’s 3.4%.

The data signals persistent service-sector inflation, driven by higher costs in transportation, leasing, and business support services. This reinforces the Bank of Japan’s challenge of balancing mild inflation against weak domestic demand and cautious wage growth.

🕕 Tuesday, 24 June 2025 | Japan’s Core Consumer Price Index (CPI) rose 2.5% year-over-year in the latest data, matching expectations and slightly above the previous reading of 2.4%.

The data suggests that inflationary pressures remain persistent, adding complexity to the Bank of Japan’s monetary policy stance, which has remained cautiously accommodative despite global tightening trends.

Japan’s au Jibun Bank Manufacturing PMI rose to 50.4 in June—above the 49.5 forecast and up from May’s 49.4—marking a return to expansion in factory activity. The Services PMI climbed to 51.5, above May’s 51.0, signalling faster growth in the service sector.

Japan’s non-seasonally adjusted CPI rose 0.3% month-on-month in May (forecast: 0.4%), while the national CPI also climbed 0.3% MoM (forecast: 0.1%). On an annual basis, national CPI held at 3.5% YoY (forecast: 3.5%; April: 3.6%), and national core CPI accelerated to 3.7% YoY (forecast: 3.6%; April: 3.5%), underscoring persistent underlying price pressures.

At the latest 5-year Japanese government bond auction, the stop-out yield ticked up to 0.982% (previous: 0.980%), reflecting modest upward pressure on long-term borrowing costs.

Foreign investors bought a net ¥1,571.3 billion in Japanese bonds (prior: –¥453.6 billion), marking a significant reversal in fixed-income flows. In equities, they boosted investments by ¥473.4 billion (prior: ¥179.8 billion), underscoring renewed appetite for Japanese stocks.

Tokyo—Japan’s exports fell 1.7% year-on-year in May, beating the 3.8% decline forecast and reversing a 2.0% gain from April. Imports plunged 7.7%, steeper than the 6.7% drop expected and following a 2.2% contraction in the previous month. The result was a trade deficit of ¥637.6 billion, narrower than the ¥893.0 billion shortfall forecast but wider than April’s ¥115.6 billion gap. The adjusted trade balance showed a deficit of ¥0.31 trillion, improved from both the ¥0.37 trillion forecast and April’s ¥0.35 trillion.

Tokyo—Japan’s core machinery orders rose 6.6% year-on-year in April, comfortably above the 4.0% forecast but down from an 8.4% gain in March. On a month-on-month basis, orders plunged 9.1%, slightly better than the 9.3% decline expected but following a 13.0% jump in March.

Tokyo—Japan’s Reuters Tankan business sentiment index for June fell to 6, down from 8 in May, according to the latest survey. The drop reflects softer corporate confidence amid lingering global uncertainties and domestic cost pressures.

Japan’s capacity utilization climbed 1.3% month-on-month in April, rebounding from a 2.4% drop in March. Industrial production fell 1.1% MoM (forecast: –1.2%; March: +0.2%), reflecting weaker factory output. Meanwhile, the tertiary industry activity index tumbled to –10.90 in April (March: +14.90), highlighting a sharp slowdown in the services sector.