Japan Focus of the Week Q2 GDP, July National CPI, July Trade

Economics Research 14 August 2026 | 4:55PM JST

Japan Focus of the Week: Q2 GDP, July National CPI, July Trade

Focus Next Week Yuriko Tanaka | n We forecast Q2 real GDP growth to show a solid increase of +1.5% qoq Goldman Sachs Japan Co., Ltd. annualized (Q1: +1.8%). We expect private consumption to drive overall growth, Tomohiro Ota posting a high growth rate of +1.6% qoq annualized (Q1: +1.4%). | Goldman Sachs Japan Co., Ltd. n We forecast July national new core CPI (excludes fresh food and energy) to rise Akira Otani +0.2 pp from June to +1.9% yoy. Price hikes likely were seen for petroleum-based | Goldman Sachs Japan Co., Ltd. items such as detergent and plastic bags and items such as laptop computers reflecting soaring memory prices in some areas. The July core CPI (excludes fresh food) is expected to rise +0.2 pp from June to +1.8% yoy. n We expect July export value to continue its high growth at +20.0% yoy (June: +19.3%), but export volume growth to be sluggish at flat yoy and decline 2.5% mom. Import value is also expected to show high growth of +21.0% yoy (June: +25.4%), resulting in a trade deficit of -¥282.5 bn (-¥156.3 bn in July 2025).

This Week’s Main Research n The government stated that the food consumption tax rate cut (c.¥5 tn) will be funded mainly through the scaling back of ‘special tax measures’ and increases in non-tax revenues, without relying on bond issuance. However, we estimate the interest income from foreign exchange reserves, which accounts for about half of non-tax revenues, to increase by c.¥1 tn in FY2027, and it would be difficult to transfer retained earnings of the foreign exchange reserves resulting from yen depreciation to the government budget. Significant retrenchment of special tax measures also looks unlikely. The government budget does not necessarily tie up bond issuance with specific expenditures or tax cuts, making it difficult to identify the funding source for a specific tax cut. Rather, we should focus on the magnitude of the increase in total government bond issuance.

This Week’s Data and Events n The Summary of Opinions from the July BOJ Monetary Policy Meeting showed that many members referred to the risk of underlying inflation rising above 2 percent. Along with this, comments related to possible need to accelerate the pace of rate hikes also increased compared to June. n The domestic corporate goods price index rose +0.1% mom in July (June: +0.5%). Prices turned negative for chemical products and petroleum & coal products, including naphtha, which had been rising since Middle East disruption.

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

Goldman Sachs Japan Focus of the Week

Upcoming Economic Indicators and Events (August 17 - 21)

Upcoming Economic Indicators and Events JST Region Indicators and events GS Consensus Previous Aug. 17 8:50 JP Preliminary GDP (Q2) qoq ann % +1.5% +2.0% +1.8% 13:30 JP Tertiary Activity Index (Jun) mom % -1.0% +1.1% 11:00 CN Retail Sales (Jul) yoy % +1.5% +1.5% +1.0% 11:00 CN Industrial Production (Jul) yoy % +4.6% +4.9% +5.3% 11:00 CN Fixed Asset Investment (Jul) ytd % -5.8% -6.2% -5.7% 21:30 US Empire Manufacturing Index (Aug) 10.0 15.6

Aug. 18 JP 5-Year JGB Auction 21:30 US Housing Starts (Jul) mom % -5.7% +19.0% 22:15 US Industrial Production (Jul) mom % +0.3% +0.1% Manufacturing Output mom % +0.2% 0.0% 22:15 US Capacity Utilization Rate (Jul) 76.3% 76.1%

Aug. 19 8:50 JP Machinery Orders (Jun) Core private orders mom % +7.0% +7.8% -12.4% 3:00 US FOMC Minutes (July 29)

Aug. 20 JP 20-Year JGB Auction 8:50 JP Customs Cleared Trade (Jul) Trade balance -¥282.5 bn -¥669.0 bn -¥409.9 bn Exports yoy % +20.0% +20.1% +19.3% Imports yoy % +21.0% +26.1% +25.4% 21:30 US Initial Jobless Claims 21:30 US Philadelphia Fed Survey (Aug) 41.4

Aug. 21 8:30 JP National CPI (Jul) Excl. fresh food (core CPI) yoy % +1.8% +1.8% +1.6% Excl. freshfood and energy (new-core CPI) yoy % +1.9% +1.9% +1.7% 9:30 JP S&P Global Japan Manufacturing PMI (Aug; Flash) 54.5 9:30 JP S&P Global Japan Services PMI (Aug; Flash) 51.2 17:00 EU S&P…