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EnglishپارسیEnglishپارسیIn September 2024, Japan's Industrial Production rose by 1.4% month-over-month, exceeding the forecasted 0.9% increase and marking a significant rebound from the previous month’s decline of -3.3%. This positive shift indicates a strengthening in Japan’s manufacturing and industrial sectors, suggesting a recovery momentum after prior contractions.
The Bank of Japan (BOJ) decided to keep interest rates steady on Thursday, signaling a continuation of its cautious approach toward monetary policy adjustments. The central bank also maintained its forecast, indicating that inflation will remain close to its 2% target over the coming years. This steady stance suggests that the BOJ is prepared to gradually reduce its extensive monetary stimulus, showing confidence in the stability of inflation near target levels while balancing economic support
In October 2024, Japanese inflation showed signs of easing, with the Tokyo CPI (year-over-year) rising 1.8%, down from the previous 2.1%. The Tokyo Core CPI (excluding fresh food) increased 1.8%, slightly above the forecast of 1.7%, but below the prior month's 2.0%. Additionally, the Tokyo CPI excluding food and energy (month-over-month) grew 0.4%, contrasting with a previous decline of -0.2%. This data reflects a moderation in overall inflationary pressures in Japan, although core inflation remains slightly above expectations.
Japan's National Consumer Price Index (CPI) increased by 2.5% YoY in September 2024, marking a slowdown from the previous reading of 3.0%, according to data released by the Japan Statistics Bureau.
Key details include:
The inflation data suggests Japan's price pressures continue to moderate, though core inflation (excluding fresh food) is still above expectations, reflecting a more persistent underlying inflation trend.
In September 2024, Japan's economy showed signs of slowdown, with weaker-than-expected performance across key indicators:
Tertiary Industry Index (MoM) for August fell by -1.1%, significantly below the forecasted decline of -0.2%, indicating reduced activity in the service sector.
On the trade front, Imports (YoY) for September grew by 2.1%, below the expected 3.2%. Exports (YoY) also underperformed, registering a decline of -1.7%, following a 5.5% raise in August, missing the 0.5% growth forecast. This highlights challenges for Japan's export sector and softer demand for foreign goods
With weaker exports, the Merchandise Trade Balance posted a deficit of ¥-294.3B, worse than the projected ¥-237.6B, suggesting a widening trade gap driven by weaker exports and slower-than-expected import growth. However, that was better than ¥-703.2B trade Balance deficit in August.
In August, Japan's economy showed encouraging signs of improvement across various key metrics:
Trade Balance (BOP Basis):
The trade deficit narrowed, with the balance improving to ¥-377.9 billion, up from ¥-482.7 billion in the previous month. This reduction in the deficit is a positive signal for the country's international trade health.
Current Account:
Japan's current account surplus exceeded expectations, rising to ¥3803.6 billion, above the forecasted ¥2921.9 billion, reflecting a stronger position in its balance of payments and external economic relations.
Labor Market (Cash Earnings):
Despite a slight miss, Cash Earnings (YoY) came in at 3.0%, just shy of the 3.1% forecast. This indicates steady wage growth, though not as robust as expected.
Household Spending:
On an annual basis, Japan's household spending contracted by -1.9% (YoY), which, while negative, was better than the -2.6% forecast. On a monthly basis, spending surged by 2.0%, comfortably beating the 0.5% estimate and recovering from a 1.7% drop in July. This shows signs of consumer resilience, likely contributing to overall economic stability.
According to the latest report from the Statistics Bureau of Japan, the Tokyo Consumer Price Index (CPI) for September recorded a year-on-year (YoY) increase of 2.2%, down from 2.6% in August.
Excluding Fresh Food and Energy, the Tokyo CPI decreased by 0.2% in September, following a 0.5% rise in August. On an annual basis, excluding Fresh Food and Energy, the CPI rose by 1.2%, maintaining the same pace as the previous month.
Meanwhile, the Tokyo Core CPI (YoY) for September fell to 2.0%, aligning with market expectations, compared to 2.4% in August.
The Bank of Japan (BOJ) kept its benchmark interest rate unchanged at 0.25%, with unanimous support from all nine decision-makers.
In its projections, the BOJ expects both economic activity and inflation to grow in the coming months. This widely anticipated decision was announced just hours after August CPI data revealed inflation had reached a 10-month high, driven by improving private consumption.
According to the Japan Statistics Bureau report, Japan’s National Consumer Price Index (CPI) rose 3.0% year-over-year (YoY) in August, up from the previous reading of 2.8%. On a monthly basis, CPI increased by 0.5%, compared to the 0.2% rise in July.
The National Core CPI (excluding fresh food) matched market expectations at 2.8% YoY in August, up from 2.7% in July. Consumer inflation, excluding food and energy prices, climbed from 1.9% to 2.0% YoY in August.
Japan's Gross Domestic Product (GDP) annualized growth rate came in at 2.9% in Q2 2024, below the expected 3.2%. On a quarter-on-quarter (QoQ) basis, GDP grew by 0.7%, missing the 0.8% expectation.
Additionally, Japan's trade balance, on a Balance of Payments (BOP) basis, was ¥-482.7 billion in July, compared to the previous ¥556.3 billion.
Japan's Overall Household Spending rose by 0.1% year-on-year in July, below the 1.2% expected but an improvement from a 1.4% decline in June. Monthly spending fell by 1.7%, missing estimates.
Meanwhile, the Leading Economic Index slightly exceeded expectations, reaching 109.5 versus 109.4.
Tokyo's Consumer Price Index (CPI) rose by 2.6% year-over-year in August, up from 2.2% in July. Tokyo's Core CPI also increased to 2.4% YoY in August, exceeding both the estimated 2.2% and market expectations.
Japan’s Unemployment Rate unexpectedly climbed to 2.7% in July, higher than both the market estimate and June's 2.5%, marking the highest jobless rate since August 2023.
Japan's Jobs-to-Applicants Ratio stood at 1.24 in July, slightly above the forecast of 1.23.
Japan's Industrial Production in July registered a monthly increase of 2.8%, below the expected 3.6%, but a significant improvement from the 4.2% decline in the previous month.