Japan’s Economy: Monthly Outlook July 2026

Research evidence excerpt

Japan’s Economy: Monthly Outlook July 2026

29 June 2026

Mizuho Securities Equity Research Economics / Domestic and Overseas Economy

Economic Monthly

Earthly stars and the moon over the ruined castle

Seeing Kioxia and Micron Technology (formerly Elpida Memory) thriving inChief Economist:

a boom, most people must feel a sense of regret. Why were JapaneseShunsuke Kobayashi

companies or the Japanese government unable to come to the rescue during+81 3 6202 8222

shunsuke.kobayashi@mizuho-sc.com the downturn?

Economist: This is, of course, mere hindsight. Needless to say, the semiconductor industry

Soichiro Hirose has historically been subject to severe cyclical swings. This also makes

+81 3 6202 8293 entrusting risk management to private-sector companies alone a tall order.

soichiro.hirose@mizuho-sc.com

However, it also goes without saying that the semiconductor industry isEconomist:

critically important as a cornerstone of national security in addition to theIichi Ogimi

overall economy. It is precisely in times of distress that the nature of+81 3 6202 8599

iichi.ogimi@mizuho-sc.com government support comes into question. The government's role inherently

includes minimizing cyclical economic fluctuations (the so-called stabilizer

effect) and addressing market failures where free competition among private

companies does not produce an optimal allocation of resources.

This, too, is of course easier said than done. It is only natural that support

policies for a given industry garner public backing only during boom times. Yet

government intervention in an industry that is producing strong results under

free-market competition does more harm than good. What is truly needed is

a policy that offers a helping hand to sectors that serve as the foundations of