–MOF has made a rare change to its trade statistics release date, citing the need to ensure the accuracy of the latest figures after finding that it failed to move parts of collected data over to a new customs computer system on Oct. 12.
By Max Sato
(MaceNews) – Here are the key Japanese economic events for the coming week. Parliamentary debate on the Takaichi government’s efforts to lift the economy with a stimulus package continues during the current 58-day session that ends on Dec. 17.
After confirming the first contraction in six quarters in the third quarter GDP on Monday, Japanese officials will see how the effects of the Trump administration’s tariffs on automobiles and metals are hurting overall exports at the start of the final quarter of 2025 in Thursday’s October trade data. Demand from Europe and Asia appears to be offsetting the decline in Japanese shipments to the key U.S. market.
Machinery orders are expected to support the key findings in the Bank of Japan’s September quarter Tankan business survey released on Oct. 1 that showed many sectors are revising up their plans to invest in new capacity to upgrade their factories and offices through automation and digitization amid widespread labor shortages.
For many households, however, the consumer inflation data due Friday is likely to come as bad news, with the annual rate hovering around 3%, above the BOJ’s 2% price stability target in the long run. The recent deprecation of the yen to the level seen in the early parts of this year could push up already high import costs in coming months.
Ahead of the BOJ’s next policy meeting on Dec. 18-19 with chatter of a third rate hike in the current normalization cycle, board member Junko Koeda, a former economics professor at Waseda University in Tokyo, will make her first known public speech since she joined the central bank in March. She is expected to use her expertise in analyzing the impact of monetary and fiscal policy on the economy and finances in her outreach speech on Thursday.
– Wednesday, Nov. 19
0850 JST (2350 GMT/1850 EST Tuesday, Nov. 18) The Cabinet Office releases September, Q3 machinery orders, outlook for Q4.
Mace News median: core orders +3.1% m/m (range: -1.0% to +5.0%) vs. Aug -0.9%; +7.6% y/y (range: +0.0% to +8.7%) vs. Aug +1.6%; Q3 -2.5% q/q vs. Q2 +0.4%, official projection -4.0%
Japan’s core machinery orders, a key leading indicator of business investment in equipment and software, are expected to post their first month-on-month increase in three months in September, up 3.1%, reflecting the need to upgrade and digitize factories, offices and shops amid widespread labor shortages. It would follow a 0.9% dip in August and a 4.6% plunge in July.
From a year earlier, core orders, excluding those from electric utilities and for ships, are forecast to rise 7.6% for a 12th straight increase, following a 1.6% gain in August.
Last month, the Cabinet Office downgraded its view on the indicator for the first time since the May 2024 report. It now said the pickup in machinery orders are “stalling,” compared to the previews statement that orders were “showing signs of a pickup.”
Koeda joined the BOJ’s nine-member board on March 26 this year and has participated in five policy-setting meetings, starting with the one on April 30-May 1. She voted for leaving the policy rate at 0.5% at each of the five meetings. Her five-year term ends on March 25, 2030.
At the bank’s latest meeting on Oct. 29-30, the board decided in a 7 to 2 vote to maintain the target for the overnight interest rate at 0.5% for the sixth straight meeting amid uncertainty over the emerging effects of the protectionist U.S. trade policy, geopolitical risks and financial markets. The majority of the board also wanted to see the stimulus effects of an economic revival package planned under Prime Minister Sanae Takaichi who took office on Oct. 21. The bank last hiked the rate by 25 basis points (0.25 percentage point) in January.
– Friday, Nov. 21
0830 JST (2330 GMT/1830 EST Thursday, Nov. 20) The Ministry of Internal Affairs and Communications releases October CPI.
Mace News median: total CPI +3.0% y/y (range: +2.8% to +3.0%) vs. Sept +2.9%; core CPI (ex-fresh food) +3.0% y/y (range: +2.8% to +3.0%) vs. Sept +2.9%; core-core CPI (ex-fresh food, energy) +3.1% y/y (range +2.9% to +3.2%) vs. Sept +3.0%
Consumer inflation in Japan is forecast to have accelerated in two key measures for the second straight month in October after the Tokyo metropolitan government finished its free base charge for water bills at the end of September as planned. The program was aimed at easing the pain of households that have been hit by elevated costs for food, energy and other necessities.
The core reading (excluding fresh food) is forecast to show a 3.0% rise on the year, after the annual rate rose to 2.9% in September from 2.7% in August, but that would still just under 3.1% seen in July.
The year-on-year rise in the total CPI is also seen rising to 3.0% from 2.9% in September and 2.7% previously. The underlying inflation measured by the core-core CPI (excluding fresh food and energy) is estimated at 3.1% after having slowed to 3.0% in September from 3.3% in August.
Japanese officials are looking for signs of sustained wage hikes by companies so that households can tide over sticky inflation. The Bank of Japan has been careful about raising interest rates as part of its policy normalization process as Japan’s economic recovery remains modest amid sluggish domestic demand and weaker exports hit by stiff U.S. import duties.
Companies have been passing higher labor and import costs on to consumers in light of widespread labor shortages and the resulting need to attract qualified workers with higher wages and benefits as well as better working conditions import costs. The recent depreciation of the yen is feared to be pushing up import costs further.
– Friday, Nov. 21 (new release date)
0850 JST (2350 GMT/1850 EST Thursday, Nov. 20) The Ministry of Finance releases October trade.
Mace News median: exports +0.8% y/y (range: +0.2% to +2.3%) vs. Sept +4.2%; imports -0.9% y/y (range: -2.1% to +0.2%) vs. Sept +3.3%; trade deficit ¥271.40 billion (range: a deficit of ¥460.00 billion to a deficit of ¥244.00 billion) vs. a revised ¥237.36 billion deficit in Sept 2025; ¥472.33 billion deficit in October 2024
Japan’s export values are forecast to post their second straight year-on-year increase in October, up 0.8%, after marking a 4.2% gain in September for the first rise in five months. The recent economic recovery in Europe and solid demand from Asia appear to be offsetting the drag from the protectionist U.S. trade policy, which likely caused Japanese shipments to the key U.S. market down for the seventh month in a row in October.
The slight increase in wobbly exports is expected to be led by computer chips, raw materials and aircraft while those of semiconductor-producing equipment, auto parts and drugs are seen down.
Import values are expected to record their first drop in two months and the sixth for the year, down 0.9%, following a 3.3% rebound in September and 5.2% fall in August. The decline is seen led by crude oil and liquefied natural gas.
Combining those factors, the trade balance is forecast to post a fourth consecutive monthly deficit, estimated at ¥271.4 billion, following a revised ¥237.36 billion shortfall in September and a wider ¥499.95 billion deficit in October 2024.