Source: Portal Site of Official Statistics of Japan (e-Stat)
This service uses the API function of the Portal Site of Official Statistics of Japan (e-Stat), but the content of this service is not guaranteed by the government.
This service uses statistical data published by the Bank of Japan, but the content of this service is not guaranteed by the Bank of Japan.
According to the Cabinet Office's preliminary GDP release on 18 May 2026 for 2026 Q1 (Jan–Mar), real GDP grew quarter-on-quarter (QoQ) +0.5% (annualized +2.1%), accelerating from +0.2% in the prior quarter. Exports rose sharply QoQ +1.7%, making external demand the main driver of growth, while the three pillars of domestic demand—private consumption, business investment, and public demand—each contributed positively at +0.3%. Nominal GDP increased QoQ +0.8% (annualized +3.4%), outpacing real growth, and the GDP deflator was up year-on-year (YoY) +3.4%, the same pace as in the previous quarter. With the BOJ proceeding with monetary normalization, an improving corporate mindset and a weaker yen appear to be supporting growth.
Real GDP in 2026 Q1 (QoQ +0.5%, annualized +2.1%) clearly accelerated from 2025 Q4 (QoQ +0.2%, annualized +0.8%). In the 12-quarter series, this is the strongest QoQ gain since 2024 Q3 (+0.7%). However, given the -0.6% QoQ contraction in 2025 Q3, the recent acceleration should be interpreted as part of a cyclical recovery. The annualized +2.1% pace exceeds estimates of Japan's potential growth (roughly 0.5–1.0%), indicating a short-term phase of relatively robust expansion.
Nominal GDP rose QoQ +0.8% (annualized +3.4%), outpacing real growth, and the GDP deflator was up YoY +3.4%, unchanged from the prior quarter. The persistent pattern since 2023 Q2 in which nominal growth exceeds real growth suggests a new post-deflation growth phase. Real GDP in level terms reached JPY 593.7 trillion, and nominal GDP reached JPY 677.2 trillion, placing nominal GDP around historical highs.
The acceleration was clearly externally driven. Exports rose QoQ +1.7%, accelerating sharply from +0.2% in the prior quarter, while imports rose only +0.5%, implying a positive contribution from net external demand. In the past 12 quarters, exports have not recorded a QoQ +1.7% gain since 2024 Q3 (+2.4%), signaling a strong rebound in external demand.
Cross-checking trade statistics (Ministry of Finance) shows monthly nominal export values averaged in the JPY 9.7 trillion range in Oct–Dec 2025, but detailed monthly data for 2026 Q1 are not yet published for direct verification. Nevertheless, the trade balance turning to surplus in Nov–Dec 2025 (Nov +JPY 306.0 billion, Dec +JPY 94.8 billion) likely underlies the Q1 export increase.
On the domestic side, private final consumption expenditure, private-sector business investment, and public demand each recorded QoQ +0.3%, a notable feature. In 2025 Q4, consumption was flat (0.0%), investment was +1.4%, and public demand was +0.2%, showing dispersion; in 2026 Q1 the three pillars uniformly supported growth. This resilience in domestic demand likely reflects the improving corporate mood and stable employment conditions discussed below.
Private consumption rose QoQ +0.3%, turning positive from 0.0% in the prior quarter. Compared with +0.7% in 2025 Q1 and +0.5% in 2024 Q3, the current increase is modest. Over the past 12 quarters consumption has typically fluctuated around +0.5%, so the current +0.3% is near average.
METI's Retail Trade Survey monthly series shows nominal retail sales at JPY 14.2 trillion in Nov 2024 (YoY +2.8%), JPY 16.1 trillion in Dec 2024 (+3.5%), and JPY 12.7 trillion in Jan 2025 (+4.4%), indicating continued YoY gains in nominal terms. That real consumption in the GDP statistics rose only +0.3% suggests price increases are restraining real purchasing power. The MIC Statistics Bureau's CPI overall index averaged 112.6 in 2026 Q1 (around YoY +1.4%), which diminishes real consumption growth relative to nominal retail sales.
Business investment rose QoQ +0.3%, down substantially from +1.4% in the prior quarter but remaining in positive territory. After turning negative in 2025 Q3 (-0.1%), Q4 and Q1 mark two consecutive quarters of positive investment. Nevertheless, investment growth remains volatile, with negative episodes such as 2024 Q4 (-0.6%) and 2024 Q1 (-2.1%) evident, so the recovery in investment is still fragile.
Cabinet Office machine orders (private-sector series, excluding ships and electric power), a 2–3 quarter leading indicator for investment, showed large swings: +5.8% MoM in Oct 2025, -9.2% in Nov, +16.1% in Dec, -5.5% in Jan 2026, and +13.6% in Feb 2026. The volatility suggests firms remain cautious in investment decisions. In the BOJ Tankan (2026 Q1), the large-manufacturing business conditions DI improved to +17 from +15 in 2025 Q4, but specific numeric investment plans are not published in the provided release, so direct confirmation of investment intent is limited.
Public demand rose QoQ +0.3%, slightly faster than +0.2% in the prior quarter. After a large increase of +2.0% in 2024 Q2, public demand has since tended to contribute modestly at around +0.3%, indicating fiscal policy is playing a steady supporting role for the economy.
Exports rose QoQ +1.7%, a sizeable acceleration from +0.2% in the prior quarter. Exports had recorded a large QoQ decline of -1.6% in 2025 Q3 but turned positive in Q4 and accelerated further in Q1. This export recovery likely reflects both the weaker yen and a pickup in overseas demand.
Imports rose QoQ +0.5%, up from 0.0% in the prior quarter. Compared with +2.2% in 2025 Q1 and +3.2% in 2024 Q3, import growth remains subdued, suggesting limited domestic demand strength. Because export growth (+1.7%) outpaced import growth (+0.5%), net external demand likely contributed positively to GDP growth.
In the BOJ Tankan (2026 Q1), the large-manufacturing business conditions DI improved to +17 from +15 in 2025 Q4. The outlook DI also improved to +15 from +12, confirming an improving trend in corporate sentiment. Large non-manufacturing DI rose to +36 from +34, with the outlook holding at +28.
The DI for mid-sized manufacturing was +16, unchanged from the prior quarter, and small-manufacturing was +7, up from +6. The broad-based improvement or stabilization across firm sizes is consistent with the GDP acceleration to QoQ +0.5%. However, the tendency for the outlook DI to lag the current DI (e.g., large manufacturing current +17 → outlook +15) indicates some continued caution among firms.
In the BOJ Tankan (2026 Q1), assumed exchange rates (USD/JPY) were 150.10 for all sizes/all industries and 148.91 for large manufacturing. BOJ market data show actual monthly average USD/JPY in 2026 Q1 at 156.71 in Jan, 155.07 in Feb, and 158.64 in Mar, for a quarter average of about 156.8. The gap between assumed rates (148.91–150.10) and realized rates (156.8) is approximately 6.7–7.9 yen, implying exporters experienced a weaker yen than they had assumed in planning.
This yen weakness is an important factor explaining the QoQ +1.7% export growth. The nominal effective exchange rate (2020=100) in 2026 Q1 was in the nominal range 69.1–69.9 and the real range 66.3–67.6, down substantially from nominal 77.1 / real 74.9 in May 2025, confirming a notable depreciation that enhances Japan's export competitiveness.
The BOJ's unsecured overnight call rate (O/N, monthly average) was 0.477–0.478% in May–Nov 2025, rose to 0.557% in Dec 2025, and stabilized at 0.728% in Jan–Mar 2026. This roughly 25 basis-point increase suggests the BOJ raised its policy rate in Dec 2025. The slight dip to 0.727% in Apr–May 2026 likely reflects intra-month liquidity fluctuations and does not indicate a change in policy stance.
Despite monetary normalization, the economy accelerated to QoQ +0.5% in Q1, indicating a time lag before rate increases fully impact the real economy. The slowdown in business investment from +1.4% to +0.3% QoQ may be an early sign of rising interest rates beginning to weigh on investment, although investment remains positive.
The monetary base (end-of-month balance) has declined steadily from JPY 656.0 trillion in May 2025 (YoY -3.4%) to JPY 582.9 trillion in Apr 2026 (YoY -11.3%). The YoY contraction widened from -3.4% in May 2025 to -11.6% in Mar 2026, confirming that the BOJ is steadily reducing the size of its balance sheet. This tightening is likely to act to restrain investment and housing activity over the medium term.
The Corporate Goods Price Index (CGPI, 2020=100) rose from 126.6 in Apr 2025 to 132.8 in Apr 2026, a YoY increase of +4.9%. By contrast, the CPI overall index averaged 112.6 in 2026 Q1 (about YoY +1.4%). The gap between CGPI YoY +4.9% and CPI overall +1.4% indicates upstream price increases have not been fully passed through to consumer prices.
However, core-core CPI (excluding fresh food and energy) averaged YoY +2.4–2.6% in 2026 Q1, suggesting pass-through is advancing outside of energy and food components. The GDP deflator's YoY +3.4% implies firms are increasingly reflecting upstream price increases in value-added prices. This ongoing pass-through helps explain why nominal GDP growth (QoQ +0.8%) exceeds real GDP growth (QoQ +0.5%).
The nominal effective exchange rate (2020=100) fell from 77.1 in May 2025 to 69.1 in Mar 2026, and the real effective exchange rate fell from 74.9 to 66.3 over the same period. This roughly 10% depreciation has improved export competitiveness and is consistent with the strong QoQ +1.7% export performance in 2026 Q1.
MIC Statistics Bureau CPI data show YoY changes in 2026 Q1 of: overall CPI +1.3–1.5%, core CPI (excluding fresh food) +1.6–2.0%, and core-core CPI (excluding fresh food and energy) +2.4–2.6%. The gap of roughly 1.0 percentage point between overall CPI and core-core CPI reflects a weakening or decline in the YoY rise of energy prices.
In 2025 Q4 the three CPI measures were more closely aligned (overall +2.1–3.0%, core +2.4–3.0%, core-core +2.9–3.1%), but in 2026 Q1 overall CPI moderated while core-core CPI remained elevated above the BOJ's 2% target, indicating underlying inflationary pressure persists even as energy-driven components ease.
The GDP deflator's YoY +3.4% outpacing CPI overall (+~1.4%) indicates price increases are more pronounced in the corporate sector than among households. Because the GDP deflator reflects export and import prices as well, yen depreciation raising import prices and relatively stable export prices may be pushing up the deflator. The divergence between nominal and real growth suggests corporate profits have room to improve, but also implies a risk of constrained household real purchasing power.
METI's industrial production index (seasonally adjusted, 2020=100) has oscillated roughly between 100–103, rising from 101.4 in Mar 2024 to 102.2 in Feb 2025. The latest observation (Feb 2025) showed a recovery of +2.3% MoM after -1.1% in Jan 2025, indicating production is moving in a sideways band.
That industrial production remains roughly flat despite QoQ +1.7% export growth in GDP suggests the export increase may reflect inventory adjustments or a sizable contribution from services exports. Monthly production data are available only through Feb 2025, so direct confirmation for 2026 Q1 production trends is limited. Coupled with the slowdown in business investment (+1.4% → +0.3% QoQ), manufacturing production may lack strong momentum.
The Cabinet Office's CI (2020=100) shows the leading index rising from 107.7 in Jan 2025 to 114.5 in Mar 2026. The coincident index edged up from 116.2 in Jan 2025 to 116.5 in Mar 2026. The improvement in the leading index signals likely economic expansion in the coming months.
However, the coincident index's volatility—falling from 116.5 in Feb 2025 to 113.9 in Aug 2025, recovering to 117.9 in Jan 2026, then easing to 116.5 in Mar 2026—indicates the recovery's underlying strength is uneven. This pattern aligns with the GDP path of -0.6% QoQ in 2025 Q3, then +0.2% in Q4 and +0.5% in Q1.
MOF trade statistics (by commodity) show monthly exports in Oct–Dec 2025 of JPY 9.77 trillion (Oct), JPY 9.71 trillion (Nov), and JPY 10.41 trillion (Dec), averaging JPY 9.96 trillion for the quarter. This is roughly 10% higher than the Jul–Sep 2025 quarter average of JPY 9.06 trillion. The GDP series shows exports at +0.2% QoQ in 2025 Q4 and +1.7% in 2026 Q1, consistent in direction with the nominal export increases in the trade statistics.
Imports averaged JPY 9.91 trillion per month in Oct–Dec 2025, up from JPY 9.30 trillion in Jul–Sep 2025. The GDP import series was 0.0% QoQ in 2025 Q4 and +0.5% in 2026 Q1, also broadly consistent with trade statistics. The trade balance turned to surplus in Nov–Dec 2025, supporting a positive external demand contribution.
METI's Retail Trade Survey shows retail sales at JPY 14.22 trillion in Nov 2024 (YoY +2.8%), JPY 16.10 trillion in Dec 2024 (+3.5%), and JPY 12.73 trillion in Jan 2025 (+4.4%), indicating continued YoY nominal gains. The GDP consumption series was 0.0% QoQ in 2025 Q4 and +0.3% in 2026 Q1, consistent with nominal retail sales' YoY gains translating into modest real consumption increases.
However, the gap between retail sales YoY gains (+2.8–4.4%) and real consumption QoQ +0.3% suggests price rises are dampening real purchasing power. Given overall CPI YoY of +1.3–1.5%, real consumption gains are substantially smaller than nominal.
Cabinet Office machine orders (core orders, excluding ships and electric power) showed large swings—+5.8% MoM in Oct 2025, -9.2% in Nov, +16.1% in Dec, -5.5% in Jan 2026, and +13.6% in Feb 2026—indicative of timing effects from large projects.
GDP business investment was +1.4% QoQ in 2025 Q4 and +0.3% in 2026 Q1. Considering machine orders lead investment by roughly 2–3 quarters, mixed order patterns in 2025 Q2–Q3 are consistent with the unstable investment growth observed in 2025 Q4–2026 Q1.
Over the past 12 quarters (2023 Q2–2026 Q1), real GDP QoQ growth has been: +0.1%, -1.4%, +0.6%, -0.3%, 0.0%, +0.7%, +0.4%, +0.4%, +0.3%, -0.6%, +0.2%, +0.5%. Several observations follow.
First, the series displays large swings: negative quarters (e.g., -1.4% in 2023 Q3, -0.3% in 2024 Q1, -0.6% in 2025 Q3) alternate with relatively strong quarters (e.g., +0.7% in 2024 Q3, +0.5% in 2026 Q1). This volatility reflects sensitivity to external demand fluctuations and temporary factors (weather, fading policy effects, etc.).
Second, since 2024 Q3 the sequence (+0.7%, +0.4%, +0.4%, +0.3%, -0.6%, +0.2%, +0.5%) shows mostly positive growth aside from 2025 Q3, suggesting a cyclical recovery is underway.
Third, in annualized terms the swing ranges from -5.4% (2023 Q3) to +2.1% (2026 Q1). Over the most recent four quarters (2025 Q2–2026 Q1) annualized growth rates were +1.4%, -2.5%, +0.8%, +2.1%, averaging around an annualized +0.5%, a pace close to potential growth and consistent with a gradual sustainable trajectory.
Private consumption has ranged from -1.0% to +0.7% QoQ over the past 12 quarters; the +0.3% in 2026 Q1 is near the series' average, and relatively small volatility suggests stable employment supports consumption.
Business investment has been more volatile (from -2.1% to +2.3% QoQ), with +0.3% in 2026 Q1 representing a low level. Negative episodes such as 2024 Q4 (-0.6%) and 2024 Q1 (-2.1%) underline firms' cautious investment stance.
Exports have swung between -2.9% and +2.5% QoQ; +1.7% in 2026 Q1 is relatively strong, representing a sharp turnaround from -1.6% in 2025 Q3.
Imports have ranged from -3.6% to +3.2% QoQ; the +0.5% in 2026 Q1 is modest, and because import growth lagged export growth, net external demand turned positive.
TOPIX (Tokyo Stock Price Index) quarter-end closes rose from 2,288.6 in 2023 Q2 to 3,497.86 in 2026 Q1, an increase of about 53%. Cumulative real GDP growth over the same period, from 2023 Q2 to 2026 Q1, is roughly +0.5% (a coarse estimate), meaning stock gains have far outpaced real economic growth.
Quarterly co-movements do not show a consistent correlation between TOPIX QoQ changes and real GDP QoQ. For example, TOPIX surged +17.0% in 2024 Q1 while real GDP fell -0.3% QoQ; conversely, TOPIX rose +10.0% in 2025 Q3 while GDP contracted -0.6% QoQ. This divergence reflects that equity prices are forward-looking while GDP is a lagging measure of realized activity.
In 2026 Q1 TOPIX rose QoQ +2.6% and real GDP accelerated QoQ +0.5%, a co-movement consistent with improving corporate earnings expectations alongside recovery in the real economy.
On the GDP release date, 18 May 2026, TOPIX closed down -0.97% at 3,826.51. Prior to the release, TOPIX climbed +1.20% on 13 May, then fell -1.03% on 14 May, -0.39% on 15 May and -0.97% on 18 May, a three-business-day decline. This drop could indicate the GDP print (+0.5% QoQ, annualized +2.1%) was below market expectations, or it could reflect other factors (overseas market moves, changing monetary policy expectations, etc.).
However, looking at the week around the release (8–18 May), TOPIX moved from 3,829.48 on 8 May up to 3,919.48 on 13 May, then down to 3,826.51 on 18 May, suggesting the GDP release had a limited isolated effect. Given multiple drivers of equity prices, isolating the GDP release as the sole cause is difficult.
Key upside drivers for future growth include continued yen weakness. The effective exchange rate stood at nominal 69.1 / real 66.3 as of Mar 2026, an historically weak yen that supports exporters. If the gap between Tankan assumed exchange rates (148.91–150.10) and realized rates (~156.8) persists, export momentum could continue.
A second upside is that improving corporate sentiment could boost investment. Tankan DIs remain high—+17 for large manufacturing and +36 for large non-manufacturing—and forward-looking indicators have improved. If this sentiment translates into increased machine orders, a firm recovery in business investment could follow.
A third upside is that moderating inflation could improve real purchasing power. Overall CPI YoY slowed from +2.1–3.0% in 2025 Q4 to +1.3–1.5% in 2026 Q1; if this trend continues, real wages could strengthen and consumption accelerate.
Downside risks include the full materialization of monetary tightening effects. The unsecured call rate rose to 0.728% in 2026 Q1 and the monetary base YoY contraction widened to -11.6% (Mar 2026). This tightening is likely to restrain business and housing investment over coming quarters.
A second downside is a slowdown in external demand. The recent export increase (QoQ +1.7%) was supported substantially by the weaker yen, so weak underlying foreign demand or trade policy shifts could reverse the export upswing.
A third downside is re-acceleration of upstream price pressures feeding into consumer prices. CGPI was up YoY +4.9% in Apr 2026; if upstream pressures pass through more fully to CPI, rising consumer inflation could erode real consumption.
As cyclical recovery proceeds, a key structural issue is lifting potential growth. The past 12-quarter average annualized growth (around +0.5%) is close to estimates of Japan's potential growth. To raise potential, improvements in labor productivity, higher labor force participation, and the promotion of innovation are essential.
The unstable profile of business investment (2026 Q1 +0.3% is low) suggests firms' growth expectations remain limited. Under monetary normalization, creating an environment that encourages firms to invest in future growth opportunities will be critical to achieving sustainable expansion.
Balancing price stability and growth is also a core challenge. The GDP deflator's +3.4% rise alongside only +0.5% real GDP growth implies much of current nominal growth stems from price increases. Achieving real growth acceleration will require supply-side improvements and productivity gains to expand real output.
GDP (Gross Domestic Product): The total value added of all goods and services produced domestically within a given period. Real GDP excludes price changes and indicates real economic growth; nominal GDP includes price changes.
GDP deflator: An index equal to nominal GDP divided by real GDP that measures the overall price level in the economy. The YoY change in the deflator represents the inflation rate for the entire economy.
Contribution: The contribution of each GDP component (consumption, investment, exports/imports, etc.) to overall GDP growth. Calculated by multiplying each component's growth rate by its share in GDP.
External demand: Net exports (exports minus imports). The contribution of external demand to GDP growth equals the contribution of exports minus the contribution of imports, indicating how international trade affects GDP.
Domestic demand: Aggregate domestic demand, comprising private consumption, business investment, housing investment, and public demand (government consumption and public investment).
CPI (Consumer Price Index): An index measuring price changes of a basket of goods and services purchased by households. Variants include the overall CPI, core CPI (excluding fresh food), and core-core CPI (excluding fresh food and energy). The BOJ's price stability target (2%) is based on core CPI.
CGPI (Corporate Goods Price Index): An index reflecting price changes of goods traded between firms, representing upstream/producer price trends and often leading movements in the CPI.
BOJ Tankan: The Bank of Japan's quarterly Tankan survey of short-term economic conditions across firms. The business conditions DI (percentage reporting 'good' minus percentage reporting 'poor') is a key indicator of current and expected economic conditions.
Effective exchange rate: A trade-weighted average exchange rate against multiple trading-partner currencies. The nominal effective exchange rate reflects exchange rates only; the real effective exchange rate also adjusts for relative price changes, reflecting true purchasing power.
Business Conditions Index (CI): A Cabinet Office index measuring quantitative changes in the business cycle. The leading index signals several months ahead, the coincident index reflects the current state, and the lagging index reflects past conditions.
Industrial production index: An index measuring the level of production in manufacturing and mining. Published monthly by METI, it is an important indicator of current economic activity.
Monetary base: The total supply of currency provided by the BOJ, comprising currency in circulation (banknotes and coins) plus BOJ current account balances. It indicates the quantitative stance of monetary policy.
Unsecured call rate: The interest rate at which financial institutions lend and borrow short-term funds unsecured. The overnight (O/N) call rate serves as the BOJ's policy-rate operating target.
This column was automatically generated by AI integrating Cabinet Office GDP data, Bank of Japan statistics, e-Stat public statistics, and market data as a macroeconomic analysis resource. This is not a recommendation to invest in any specific security. Please make investment decisions at your own responsibility and consult professionals as needed.