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Japan’s producer price index fell 0.2% month-on-month in May (forecast: +0.3%), marking the first monthly contraction in recent readings. Year-on-year PPI growth slowed to 3.2% (forecast: 3.5%; April: 4.1%), underscoring easing inflationary pressures at the factory gate.

Japan’s adjusted current account surplus fell to ¥2.31 trillion in April from ¥2.72 trillion in March, while the non-seasonally adjusted surplus dropped to ¥2.258 trillion (forecast: ¥2.560 trillion; March: ¥3.678 trillion). GDP stagnated in Q1, with quarter-on-quarter growth at 0.0% (forecast: –0.2%; Q4: +0.6%) and annualized growth at –0.2% (forecast: –0.7%; Q4: +2.2%), even as the GDP deflator rose 3.3% YoY (forecast: 3.2%; Q4: 2.9%), signalling ongoing price pressures.

Japan’s household spending fell 0.1% year-on-year in April (forecast: +1.5%; March: +2.1%), marking the first annual decline in months. On a monthly basis, spending plunged 1.8% (forecast: –0.8%; March: +0.4%), signaling a notable pullback in consumer outlays.

At the latest 30-year Japanese government bond auction, the stop-out yield fell to 2.904% (previous: 2.941%), reflecting slightly stronger demand and downward pressure on long-term borrowing costs.

Foreign investors sold ¥118.0 billion of Japanese bonds (previous: +¥100.4 billion), marking a significant shift in fixed‐income flows. Conversely, they increased their stake in Japanese stocks by ¥336.1 billion (previous: ¥309.1 billion), underscoring sustained appetite for equities.

Japan’s overall wage income growth in April was 2.3% year-on-year (forecast: 2.6%; March: 2.3%), matching the prior month but missing estimates. Overtime pay climbed 0.8% year-on-year in April (March: –0.4%), signaling a rebound in extra hours worked.

au Jibun Bank’s Services PMI for May came in at 51.0, above the 50.8 forecast but down from April’s 52.4, indicating slower expansion in Japan’s service sector.

Japan’s au Jibun Bank Manufacturing PMI climbed to 49.4 in May, above the 49.0 forecast and up from April’s 48.7, yet remains below the 50 threshold, indicating factory-sector contraction persists.

Japan’s corporate capital expenditure climbed 6.4% year-on-year in Q1, well above the 3.8% forecast and reversing a 0.2% decline a year earlier, highlighting a rebound in business investment.

Large retailers’ sales rose 0.5% month-on-month in April, reversing March’s 1.2% decline and outpacing expectations. On a year-on-year basis, large-scale retail sales held steady at 3.0%, in line with forecasts, while overall retail sales expanded 3.3% YoY—above the 2.9% consensus and up from 3.1%—underscoring resilient consumer demand.

Japan’s industrial production fell 0.9% month-on-month in April, shallower than the 1.4% drop expected and reversing a 0.2% gain in March. Looking ahead, output is forecast to rebound 9.0% MoM in May—well above the prior 1.3% projection—before plunging 3.4% in June, swinging from an earlier forecast of a 3.9% rise.

Jobs-to-applications ratio remained at 1.26 in April—matching forecasts and March’s reading—while the unemployment rate held at 2.5%, underscoring continued stability in the labour market.