By Max Sato
(MaceNews) – Here are the key Japanese events for the coming week.
The first quarter GDP data is expected to show the economy has overcome a temporary contraction in the July-September quarter last year, led by sluggish but resilient consumer spending and solid business investment in digitization.
The weak yen and higher energy prices are forecast to push Japan’s trade balance into its first deficit in three months while exports are set to post their eighth straight year-on-year increase after having hit a fresh record high in March, thanks to demand for computer chips in Asia and chip-making equipment in Europe. Core machinery orders are expected to have slipped back in March after a surge in February abut the first quarter figure is seen much stronger than the official projection made in February.
On the inflation front, fuel and utility subsidies are seen capping energy price hikes caused by the Middle East conflict but the price levels of many goods remain elevated, eroding the purchasing power of many households.
Tuesday, May 19
0850 JST (2350 GMT/1850 EST Monday, May 18) The Cabinet Office releases the preliminary January-March quarter GDP.
Mace News median: +0.5% q/q (range +0.1% to +0.8%) vs. Q4 revised +0.3%; +1.7% annualized (range +0.4% to +3.3%) vs. Q4 revised +1.3%; +0.8% y/y (range +0.5% to +1.1%) vs. Q4 revised +0.4%
Japan’s wobbly economy is forecast to have grown 0.5% on quarter, or an annualized 1.7%, in Q1 for the second straight growth after rising 0.3% (+1.3%) in Q4 and falling 0.7% (-2.6%) in Q3, the first contraction in six quarters.
Consumer spending, which accounts for about 55% of total domestic output, is seen up 0.2% on quarter (+0.3% in Q4) for an eighth consecutive increase, but many households are cautious about spending beyond necessities amid slow wage growth and elevated costs.
Q1 GDP expansion is expected to be also led by solid demand for business investment in artificial intelligence data centers, a rebound in public works spending and a slight gain in net exports.
Thursday, May 21
0850 JST (2350 GMT/1950 EDT Wednesday, May 20) The Ministry of Finance releases April trade.
Mace News median: exports +9.4% y/y (range: +8.5% to +10.0%) vs. +11.5% March, revised down from +11.7%; imports +8.8% y/y (range: +7.1% to +9.4%) vs. 10.9% in March; trade deficit ¥96.25 billion (range: a deficit of ¥200.70 billion to a surplus of ¥67.80 billion) vs. ¥643.00 billion surplus in March, revised down from ¥667.00 billion; ¥149.52 deficit in April 2025
Japanese export values are forecast to post their eighth straight rise on year in April, up 9.4%, after rising a revised 11.5% to a record high of ¥11.0 trillion in March. The increase is seen driven by computer chips, non-ferrous metals and mineral fuels, as seen in recent months. This is more than offsetting U.S. tariff-caused declines in shipments of autos, auto parts and iron/steel.
Import values are expected to mark their third straight rise, up 8.8%, after rising 10.9% in March. Japanese refineries are increasing purchases of crude oil from the United States and other producers in the face of an effective blockade of the Strait of Hormuz during the Iran war, which has slashed Gulf state oil production and exports to the world, particularly to Asia.
The trade balance is estimated to be a deficit of ¥96.25 billion, the first negative figure in three months, after posting a ¥643.00 billion surplus in March, revised down from ¥667.00 billion. It compares to a ¥149.52 deficit in April 2025.
Thursday, May 21
0850 JST (2350 GMT/1950 EDT Wednesday, May 20) The Cabinet Office releases March, Q1 machinery orders, Q2 outlook.
Mace News median: core orders -13.2% m/m (range: -20.0% to -3.1%) vs. Feb +13.6%; +4.5% y/y (range: -9.8% to +8.2%) vs. Feb +24.7%
Japan’s core machinery orders, a key leading indicator of business investment in equipment and software, are expected to slump 13.2% on the month in March, reversing a 13.6% surge in February that was boosted by one-off large orders.
Looking ahead into the April-June quarter, service providers are expected to continue placing orders for computers to ease widespread labor shortages with automation and digitization.
Last month, the Cabinet Office maintained its assessment that machinery orders were “showing signs of a pickup.”
From a year earlier, core orders excluding those from electric utilities and for ships are projected to rise 4.5% after jumping 24.7% the previous month.
Thursday, May 21
1400 JST (0500 GMT/0100 EDT Thursday, May 21) The Bank of Japan releases the April real trade indexes.
Friday, May 22
0830 JST 0830 JST (2330 GMT/1930 EDT Thursday, May 21) The Ministry of Internal Affairs and Communications releases April CPI.
Mace News median: total CPI +1.8% y/y (range: +1.6% to +1.9%) vs. Mar +1.5%; core CPI (ex-fresh food) +1.7% y/y (range: +1.5% to +1.8%) vs. Mar +1.8%; core-core CPI (ex-fresh food, energy) +2.2% y/y (range +1.9% to +2.3%) vs. Mar +2.4%
The core measure unexpectedly ticked up in March as the Iran war drove the national average retail gasoline price to a record high in mid-month, just before renewed subsidies took effect to cap fuel price markups.
The annual rate of the total CPI is seen accelerating to 1.8% in April from 1.5% the previous month. Underlying inflation, as measured by the core-core CPI that excludes both fresh food and energy, is estimated at 2.2%, down from 2.4% in March.
Tokyo CPI, a leading indicator of the national trend, slipped below 2% across all three key measures in April as declines in energy prices and child daycare fees weighed on overall prices.
Looking ahead, however, the Mideast conflict is making the supply of naphtha tighter, which in turn is squeezing production of plastics and resins and forcing firms to raise the prices for packaging.