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Japan Capital Spending Beats Forecast as 10-Year JGB Yield Approaches 3%

Japanese corporate investment strengthened in the second quarter, while government borrowing costs climbed to their highest levels in decades, reinforcing expectations that the Bank of Japan could continue tightening monetary policy.

Capital spending increased 1.6% year over year in Q2, significantly outperforming expectations for a 0.2% decline and accelerating from virtually no growth in the previous quarter.

The stronger investment figures suggest Japanese businesses remain relatively resilient despite geopolitical and energy-price uncertainty. Corporate profits also increased sharply during the quarter, while AI-related investment has been supporting spending in some industries.

Meanwhile, Japan's 10-year government bond auction produced an average yield of 2.995%, up sharply from 2.840% at the previous auction. The highest accepted yield reached 3.011%, as the benchmark 10-year JGB yield touched the psychologically important 3% level for the first time since 1996.

Japanese yields have been rising as investors price in higher inflation risks, fiscal concerns and the possibility of additional Bank of Japan rate hikes. Renewed tensions involving Iran and higher oil prices have added to inflation concerns globally.

The combination of stronger-than-expected business investment and rising bond yields strengthens the case for further BOJ policy normalization. For markets, that could provide support for the yen while keeping upward pressure on Japanese borrowing costs.

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European Investor 09-01-26

Japan’s Industrial Production Unexpectedly Rises 0.1% in July

Japan’s industrial production increased 0.1% month-over-month in July, outperforming market expectations for a 0.7% decline.

The result nevertheless marked a sharp slowdown from the 1.9% increase recorded in the previous month. Still, avoiding the expected contraction suggests Japan’s manufacturing sector remained more resilient than economists had anticipated.

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WS News 08-31-26

Tokyo Core Inflation Rises to 1.8% in August

Tokyo’s core consumer price inflation rose 1.8% year over year in August, accelerating slightly from 1.7% in July. The reading was in line with the 1.8% market forecast.

The data indicate that inflationary pressures in Japan remain relatively persistent and close to the Bank of Japan’s 2% target. Tokyo inflation is closely watched as an early indicator of nationwide price trends.

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The Investor 08-28-26

Japan’s BoJ Core Inflation Slows to 2.3%

Japan’s inflation pressures showed further signs of easing, with the Bank of Japan’s core consumer price index rising 2.3% year-over-year, down from 2.6% previously.

The decline suggests underlying inflation momentum is moderating, although the measure remains above the Bank of Japan’s 2% inflation target.

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WS Investor 08-25-26

Japan Inflation Edges Higher as Services Activity Strengthens

Japan’s economic data showed a modest pickup in inflation alongside stronger services activity in August.

National core CPI rose 1.8% year over year in July, matching expectations and accelerating from 1.6% previously. Headline consumer prices increased 0.4% month over month, slightly faster than the previous 0.3% rise.

Meanwhile, the S&P Global Services PMI climbed to 52.3 in August from 51.2, indicating a stronger expansion in Japan’s services sector.

Overall, the figures point to gradually firmer inflation and resilient domestic activity. The combination could support expectations that the Bank of Japan will maintain a cautious path toward further monetary-policy normalization.

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Global Finance News 08-21-26

Japan Trade Deficit Widens in July but Beats Expectations

Japan recorded a trade deficit of ¥634.5 billion in July, widening sharply from the revised ¥409.9 billion deficit in the previous month.

Despite the deterioration, the result was slightly better than market expectations for a ¥680.0 billion deficit.

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WS News 08-20-26

Japan’s Economy Slows in Q2 as GDP Growth Misses Expectations

Japan’s economy expanded at a slower-than-expected pace in the second quarter, signaling softer economic momentum.

GDP grew 0.3% quarter-over-quarter in Q2, below the 0.5% forecast and slowing from 0.5% in the previous quarter. On an annual basis, GDP increased 1.1%, also missing expectations for 2.0% growth and easing from 1.9% previously.

Meanwhile, the GDP price index rose 2.6% year-over-year, above the 2.4% forecast but down from 3.2% in the previous quarter.

The data present a mixed picture for the Bank of Japan. Persistent price pressures support the case for further monetary policy normalization, while weaker-than-expected economic growth could encourage policymakers to remain cautious about the timing and pace of additional rate increases.

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Global Finance News 08-17-26

Japan Current Account Swings Into Deficit in June, Missing Expectations

Japan's current account weakened sharply in June, with the unadjusted balance unexpectedly moving into deficit and the adjusted surplus coming in well below market expectations.

The non-seasonally adjusted current account recorded a ¥92 billion deficit, compared with expectations for a ¥1.512 trillion surplus. That marked a dramatic deterioration from the ¥3.968 trillion surplus reported in the previous month.

The seasonally adjusted current account remained in surplus but also weakened significantly, falling to ¥1.40 trillion from ¥3.06 trillion. Economists had expected a considerably stronger ¥2.50 trillion surplus.

The weaker-than-expected figures point to a significant deterioration in Japan's external balance during June. While monthly current-account data can be volatile, the magnitude of the shortfall relative to expectations could draw attention to changes in Japan's trade flows, overseas investment income and import costs.

For markets, the data provide a softer signal for the Japanese economy and could factor into expectations for the yen and Bank of Japan policy, particularly alongside upcoming inflation, wage and growth indicators.

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The Investor 08-10-26

Japan Household Spending Falls Sharply in June, Missing Expectations

Japanese household spending weakened significantly in June, raising concerns about the strength of domestic consumption.

* Household Spending (YoY): -3.3%
* Forecast: +0.8%
* Previous: -0.4%
* Household Spending (MoM): -6.4%
* Forecast: -3.1%
* Previous: +3.7%

Household spending fell 3.3% from a year earlier, sharply missing expectations for a return to growth. On a monthly basis, spending dropped 6.4%, more than twice the expected decline and reversing May’s 3.7% increase.

The figures suggest Japanese consumers remained cautious despite improving wages, potentially reflecting continued pressure from higher living costs. Weak household demand could become a concern for Japan’s broader economic recovery, given the importance of consumption to domestic growth.

For markets, the unexpectedly weak data may slightly reduce expectations for near-term monetary tightening by the Bank of Japan. That could put some pressure on the yen while providing support for Japanese equities, particularly if investors expect monetary conditions to remain accommodative for longer.

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WS News 08-07-26

Japan Services PMI Falls More Than Expected in July as Services Sector Growth Slows

Japan's services sector expanded for the fourth consecutive month in July, although growth lost momentum more than expected.

The S&P Global Japan Services PMI came in at 51.2, below the 51.9 market consensus and down from 52.2 in June. While the reading remains above the 50-point threshold that separates expansion from contraction, it signals that activity in the country's services sector continued to slow during the month.

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Global Finance News 08-05-26

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