Japan: 2026 Kumamoto earthquake

Research evidence excerpt

Japan: 2026 Kumamoto earthquake

Global Markets Research

Japan: 2026 Kumamoto earthquake 29 July 2026

Economics - Japan

(1) We could see economy bounce back quickly if impact is confined to operating rates, but (2) Research Analysts

extent of damage to capital stock will warrant attention too Japan Economics

Kengo Tanahashi - NSC

(a) No announcements of serious or wide-ranging damage to production kengo.tanahashi@nomura.com

facilities at present, (b) political events will warrant attention too +81 3 6703 1295

Yuki Ito - NSC

• Looking back at previous major earthquakes show that the scale and length of yuki.ito@nomura.com

economic impact depends on factors such as whether: (1) the impact is confined to +81 3 6703 3867

declines in operating rates at factories, retail stores, and other facilities; and (2) the

Kyohei Morita - NSC disasters cause major damage to these facilities. We do not yet know the full extent of kyohei.morita@nomura.com

the damage from the latest quake. Economic activity might remain in the doldrums for +81 3 6703 1395

quite some time, especially in the quake-affected regions, if it turns out that the impact

was not limited to lower operating rates but included major damage to capital stock.

• In terms of the near-term economy, such as 2026 Q3 GDP, our focus is on: (1) the

strength of the downward pressure on factors such as semiconductor-related

production and inbound visitor demand; and (2) the scale and timing of recovery and

reconstruction demand, including housing investment and public works.

• We think the government's first responses will be funded out of FY26 reserves (which

have already been restored to ¥1trn via the supplementary budget). We will also be

keeping a close eye on the political schedule, including a Cabinet reshuffle and LDP