Japan Focus of the Week September 21 25

Economics Research 18 September 2026 | 11:45PM JST

Japan Focus of the Week: September 21-25

Focus Next Week Yuriko Tanaka | n Japan is on holiday for the first half of the week (September 21-23), with working Goldman Sachs Japan Co., Ltd. days just on Thursday and Friday. There are no important data releases Tomohiro Ota scheduled during the week. | Goldman Sachs Japan Co., Ltd.

This Week’s Main Research n BOJ Governor Kazuo Ueda stated it has become important to anchor underlying price rises at 2% and thus prevent them from deviating upward above 2%, expressing the view that ‘the policy phase has changed’ in that sense. He noted that financial conditions remain accommodative even after this rate hike, suggesting the BOJ’s stance is to continue raising rates, but also pointed out that rapid rate hikes have negative aspects. We continue to expect the next rate hike in January next year. n The FY2027 budget requests total ¥143 tn, up considerably by +¥21 tn from the FY2026 budget requests. We expect that the FY2027 initial budget is unlikely to be reduced meaningfully from these requests, and we forecast that the government will run a primary deficit of c.1.5% of GDP even assuming a small increase in revenue. We expect ‘calendar-basis Japanese Government Bond (JGB) market issuance,’ to increase by c.¥13 tn. These figures could change significantly depending on the upcoming budget formulation.

This Week’s Data and Events n The Bank of Japan (BOJ) held its Monetary Policy Meeting (MPM) on September 17-18, and, as was widely expected, decided to raise its policy rate guidance on the overnight call rate (TONA) by 25 bp to 1.25% (by a 7-to-2 majority vote). n The August national new core CPI (excludes fresh food and energy) was unchanged from July at +1.9% yoy, coming in slightly below the market forecast (+2.0%). The global core CPI (excludes food other than alcohol and energy) accelerated by +0.2 pp from July to +1.6% yoy. The core CPI (excludes fresh food) came in at +1.7% yoy, below the market forecast of +1.8%, due to the resumption of government price control measures (electricity and gas). n August export volume maintained positive growth for the sixth consecutive month at +2.5% yoy, but turned down on a seasonally adjusted mom basis (our calculation) to a decline of -3.3%. Semiconductor-related export and import values both continue to increase significantly.

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Goldman Sachs Japan Focus of the Week

Upcoming Economic Indicators and Events (September 21-25)

Upcoming Economic Indicators and Events JST Region Indicators and events GS Consensus Previous Sep. 21 JP Holiday

Sep. 22 JP Holiday 23:00 US Richmond Fed Manufacturing Survey (Sep) 4

Sep. 23 JP Holiday 17:00 EU S&P Global Euro Area Manufacturing PMI (Sep; Flash) 52.7 17:00 EU S&P Global Euro Area Services PMI (Sep; Flash) 51.6 22:45 US S&P Global US Manufacturing PMI (Sep; Flash) 53.6 53.9 22:45 US S&P Global US Services PMI (Sep; Flash) 56.0 56.5

Sep. 24 9:30 JP S&P Global Japan Manufacturing PMI (Sep; Flash) 54.9 9:30 JP S&P Global Japan Services PMI (Sep; Flash) 52.5 21:30 US Initial Jobless Claims

Sep. 25 JP JGB Liquidity Supply Auction 21:30 US Core Durable Goods Orders (Aug) mom % +0.5% +0.4% Core Capital Goods Orders (Aug) mom % +1.2% 23:00 US U of Michigan Consumer Sentiment (Sep; Final) 47.8 5-10yr Inflation Expectations 3.4%

Source: Goldman Sachs Global Investment Research, Bloomberg