- Japan's producer prices rose 7.2 % year-on-year in July 2026, easing slightly from a revised 7.3 % increase in June.
- The latest figure came in below the market expectations of 7.4 %.
- This data points to a minor cooling in commodity and energy cost pressures.
- According to the latest Reuters Tankan survey, Japan's business confidence improved in August 2026, driven by strong semiconductor demand and robust domestic consumption.
- The manufacturing sentiment index rose from 13 in July to 18 in August, reaching its highest level since March 2026, while the non-manufacturing index increased from 25 to 28.
- Despite the current gains, manufacturers expect their confidence index to moderate slightly to 16 by November, reflecting cautious optimism regarding future business conditions.
- Japan's Ministry of Health, Labour and Welfare announced that June cash earnings rose 3.4% year-on-year to 531,677 yen, or about 3,373.6 dollars.
- Japan's real wages in June maintained a 1.6% year-on-year growth, marking the sixth consecutive month of increases.
- Basic wages for Japanese workers increased by 3.4% year-on-year in June, while overtime pay remained at a 2.8% growth rate.
- The Bank of Japan maintained its short-term interest rate at 1 % on July 31 while signaling further borrowing cost increases amid government efforts to support the weak yen through market intervention.
- The government intervention followed a 71 magnitude earthquake in Kumamoto, and Tokyo's actions received support from US Treasury Secretary Scott Bessent regarding the undervalued currency.
- While the central bank balanced economic resilience and inflation pressures from geopolitical conflicts, most analysts expect another rate hike to 1.25 % by the end of the year.
- Japan's economy showed mixed signals in mid-2026, with factory output growing and unemployment remaining steady while retail sales decelerated.
- June retail sales grew by only 0.5% year-over-year, marking a sharp slowdown from May's revised 5.0% and missing the expected 3.1%.
- Meanwhile, rising inflation in Tokyo pushed stocks and the yen sharply higher.