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On May 13, 2025, the Bank of Japan reported that M2 Money Stock rose by 0.5% year-on-year in April, below the market consensus of 0.6% and down from March’s 0.8%, signaling a cooling in narrow money expansion. Broad money (M3) stood at ¥2,194.7 billion at end-April, shy of the ¥2,203.0 billion expected, marking the smallest month-end stock since early in the year.

On May 9, 2025, Japan’s Ministry of Finance reported that the seasonally adjusted current account surplus for March contracted to ¥2.72 trillion—above forecasts of ¥2.42 trillion but down from February’s ¥2.91 trillion. The non-seasonally adjusted current account came in at ¥3.678 trillion, matching expectations but below February’s ¥4.061 trillion. Meanwhile, bank lending growth eased to 2.4% year-on-year in April, below the 2.8% forecast and March’s 2.8%, signaling cooling credit expansion. The Economy Watchers Current Index also dipped to 42.6 in April, missing the 44.7 consensus and falling from March’s 45.1, pointing to weakened consumer and business sentiment across the economy.

Japan's services sector expanded in April, with the au Jibun Bank Services PMI increasing to 52.4 from 50.0 in March, surpassing the preliminary estimate of 52.2. This marks the sixth consecutive month of growth, driven by the fastest rise in new business since May 2024. However, business confidence declined to its lowest since January 2021, and input costs reached a 26-month high due to rising expenses in raw materials, fuel, and labor. Employment in the sector grew for the 19th straight month, with the pace of job creation accelerating to a three-month high

Japan’s jobs-to-applicants ratio rose to 1.26 in March, beating expectations of 1.25 and up from 1.24 in February, indicating continued strength in job availability. However, the unemployment rate edged up slightly to 2.5%, from 2.4%, suggesting a modest increase in job seekers despite the overall tight labor market.

Japan’s Household Confidence Index dropped to 31.2 in April, down from 34.1 in March and below the expected 33.9, marking its lowest level since August 2022. The decline reflects growing concerns about inflation, wage stagnation, and economic uncertainty, despite the Bank of Japan’s recent policy shift.

The Bank of Japan left its benchmark interest rate unchanged at 0.50%, in line with expectations. This marks the second consecutive meeting with no rate change following its historic March hike, as policymakers assess inflation dynamics and wage growth before making further moves. The BoJ reiterated its cautious approach to tightening, signaling that future hikes would depend on sustainable inflation and economic momentum.

Japan’s retail sales rose 3.1% YoY in March, slightly below expectations of 3.6%, yet well above the 1.3% increase a year ago, showing steady consumer demand. Meanwhile, Large Retailers’ Sales dropped 1.2% MoM, reflecting some monthly weakness, while large-scale retail sales grew 3.0% YoY, beating the forecast of 2.0%. Overall, the data points to resilient annual growth despite short-term fluctuations.

Japan’s industrial production fell by 1.1% in March, worse than the expected -0.5%, following a strong 2.3% gain in February. However, forward-looking forecasts show optimism: output is expected to rise 1.3% in April and 3.9% in May, suggesting a rebound in manufacturing activity amid improving demand and easing supply chain pressures.

Inflation in Tokyo rose sharply in April, with Tokyo CPI (YoY) jumping to 3.5% from 2.9%, signaling rising price pressures. The Tokyo Core CPI (YoY), which excludes fresh food, also climbed to 3.4%, beating the forecast of 3.2%. Notably, CPI excluding food and energy (YoY) surged to 2.0%, nearly doubling from the previous 1.1%, while the MoM figure hit 0.7%. These figures suggest broad-based inflation and could influence future Bank of Japan policy discussions.

Japan’s Core CPI held steady at 2.2% in March, underperforming the 2.4% forecast. The data could ease pressure on the Bank of Japan’s policy tightening expectations.

Japan’s inflation accelerated in March, with the National Core CPI rising 3.2% year-over-year, matching expectations and up from 3.0% previously. The overall National CPI climbed 3.6% annually, slightly below the prior 3.7%. On a monthly basis, both the headline CPI and the non-seasonally adjusted CPI rose by 0.3%, marking a rebound from earlier declines.

In the latest week, Japanese investors sold ¥512.0 billion worth of foreign bonds, signaling reduced overseas exposure. Meanwhile, foreign investors bought ¥1,043.7 billion in Japanese stocks, continuing strong demand for Japan’s equity markets.