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Tokyo’s headline CPI held at 3.4% year-on-year in May, matching April’s rate. Excluding food and energy, prices rose just 0.1% month-on-month—down from April’s 0.7% jump—and 2.1% year-on-year, up from 2.0%. Meanwhile, the Tokyo core CPI (which strips out only fresh food) climbed to 3.6% YoY, above forecasts of 3.5% and April’s 3.4%, underscoring resilient underlying price pressures.

Bank of Japan data show the core consumer price index rose 2.4% year-on-year, above the 2.3% forecast and up from 2.2% in the prior reading, underscoring persistent underlying inflation pressures.

The au Jibun Bank Manufacturing PMI for May stood at 49.0, matching forecasts and up from April’s 48.7, but still below the 50-point threshold, indicating ongoing contraction in factory activity. Meanwhile, the Services PMI fell to 50.8 in May from 52.4 in April, signalling a slowdown in service-sector growth even as it remains in expansion territory.

Foreign investors bought a net ¥2,824.6 billion of Japanese government bonds, up from ¥1,928.7 billion previously, reflecting renewed appetite for sovereign debt. Meanwhile, net purchases of Japanese equities reached ¥714.9 billion, rising from ¥439.4 billion, underscoring growing confidence in the stock market.

Core machinery orders jumped 13.0% month-on-month in March, defying forecasts for a 1.5% decline and accelerating from February’s 4.3% rise. Year-on-year, orders climbed 8.4%, well above the –2.2% estimate and reversing February’s 1.5% gain, underscoring a sharp rebound in business investment.

The Ministry of Finance’s adjusted trade balance showed a ¥0.41 trillion deficit in April, deeper than the ¥0.24 trillion shortfall forecast and below March’s ¥0.29 trillion deficit. Exports edged up 2.0% year-on-year—matching expectations but down from a 4.0% gain previously—while imports fell 2.2% YoY, improving on the –4.5% forecast. Overall, the unadjusted goods balance registered a ¥115.8 billion deficit versus a ¥227.1 billion surplus expected and March’s ¥559.4 billion surplus.

On May 16, 2025, Japan’s Ministry of Economy, Trade and Industry reported that capacity utilization fell by 2.4% month-on-month in March—steeper than the 1.1% decline forecast—underscoring excess slack in factory resources. Industrial production, however, rose 0.2% MoM, beating expectations for a 1.1% drop and following a 2.3% gain in February, suggesting a mixed recovery in output despite underused capacity.

On May 16, 2025, Japan’s Cabinet Office released first-quarter GDP figures showing a 0.7% year-on-year contraction—worse than the 0.2% decline forecast and reversing February’s 2.4% gain. Quarter-on-quarter GDP fell 0.2%, missing the 0.1% drop expected and down from a 0.6% expansion in Q4. Despite the overall weakness, capital expenditure rose 1.4% QoQ—outpacing the 0.8% forecast—while private consumption was flat after a 0.1% gain. External demand subtracted from growth, with net exports down 0.8% QoQ (forecast –0.6%), and the GDP deflator accelerated to 3.2% YoY, matching expectations and up from 2.9%.

Japan’s latest 5-year government bond (JGB) auction saw a yield of 0.980%, up from the previous 0.938%. This marks the highest level in over a decade, reflecting rising expectations for BOJ policy normalization and persistent inflationary pressures.

On May 15, 2025, data showed that in the latest weekly tally, foreign investors sold a net ¥541.2 bn of Japanese Government Bonds, reversing the prior week’s ¥435.2 bn purchase, while net purchases of Japanese stocks surged to ¥968.0 bn from ¥280.8 bn. In monthly figures, investors returned to bonds with net buying of ¥1,923.2 bn—after a previous net sell-off of ¥541.2 bn—while equity purchases eased to ¥439.0 bn from ¥968.0 bn in the prior month.

On May 14, 2025, Japan’s Ministry of Economy, Trade and Industry reported that the Producer Price Index rose by 0.2% month-on-month in April, matching forecasts of 0.2% but down from March’s 0.4% gain, indicating a slowdown in wholesale price momentum. Year-on-year, PPI climbed 4.0%, in line with expectations yet easing from a 4.3% increase in April 2024, underscoring more moderate input-cost pressures across the production sector.

On May 14, 2025, Japan’s Finance Ministry conducted its 30-year government bond auction, where the winning yield climbed to 2.941%, up sharply from the 2.414% seen at the previous auction, reflecting softer demand amid rising global interest rates and ongoing inflationary pressures.