Japan

Research evidence excerpt

Japan

Ayako Fujita (81-3) 6736-1172 Japan Economic Research J P M O R G A Nayako.fujita@jpmorgan.com

JPMorgan Securities Japan Co., Ltd. 10 July 2026

Takuho Morimoto (81-3) 6736-6682

takuho.morimoto@jpmorgan.com

Japan auto sales still appear to be holding at elevated levels (Figure

1).

• Bowing to market pressure, the government has shift-

ed its messaging on its policy Figure 1: Real auto sales and CAI durable goods index

2022=100, sa

• However, officials insist the policy direction is

unchanged, keeping the high-pressure stance intact 130

• Real consumption accelerated in 2Q, prompting us to 120 Auto sales, units

raise our 2Q growth forecast from 0.8%q/q saar to

1.3% 110

• Next week: Large firms’ sentiment to remain firm; 100

May machinery orders to fall after April surge CAI

With JGB and FX markets growing cautious over the govern- 2022 2023 2024 2025 2026 2027

ment’s growth strategy, the administration has stepped up its Source: JADA, BoJ, J.P. Morgan.

public communications. The government indicated it will

revise language in the initial draft that referred to “close coor- May wages firm despite calendar noise

dination between BoJ and the administration’s policies” and

In the May Employers’ Survey, headline wages rose 3.2%oya,

will instead explicitly state that it respects the BoJ’s indepen-

marking a fourth consecutive month of wage growth above

dence. Finance Minister Katayama also signaled a policy

3%. This was a tenth below our expectation, but the details

stance aimed at encouraging pension funds to expand domes-

suggest that solid underlying wage momentum has been

tic investment. These moves—especially the latter—have

maintained. In the constant-sample series—which helps strip

helped to temporarily ease market pressure. At the same time,