Japan

Japan’s consumer inflation slowed slightly in February due to energy subsidies but continued trending up amid a record spike in rice prices and indications of strong wage growth, keeping interest-rate hike expectations intact, the Wall Street Journal reported. Overall consumer prices rose 3.7% in February from a year earlier, compared with the 4.0% growth seen in January, government data showed Friday. Energy prices rose 6.9% on the year, much slower than the 10.8% increase seen the previous month, as the government reintroduced subsidies for electricity and gas bills.

The Bank of Japan kept interest rates steady on Wednesday and warned of heightening global economic uncertainty, suggesting the timing of further rate hikes will depend largely on the fallout from potentially higher U.S. tariffs, Reuters reported. But Governor Kazuo Ueda also said rising food costs and stronger-than-expected wage growth could push up underlying inflation, highlighting the central bank's attention to mounting domestic price pressures. "Japan's wage and price conditions are on track, possibly stronger than expected. But the uncertain U.S.

Japan’s largest labor union group said its workers secured the highest pay deal in more than three decades, supporting the case for further gradual interest rate hikes from the Bank of Japan, Bloomberg News reported. Some 760 affiliated unions under the trade union federation Rengo have so far secured an average pay gain of 5.46% in ongoing annual wage negotiations, according to its initial tally released on Friday. That’s the highest level since 1991 when compared with past final tally figures, and exceeded last year’s initial reading of 5.28%.

Japan’s trade minister has failed to win an immediate exemption from U.S. President Donald Trump’s tariff campaign even as he doubled down on the request in his first in-person discussions with U.S. counterparts, Bloomberg News reported. "We have requested that Japan should not be subject to the tariff measures that the U.S. government has announced so far,” trade minister Yoji Muto said.

The Japanese economy grew at a slower pace than initially estimated in the October-December period, sending an unwelcome sign of fragility as the trade outlook darkens, the Wall Street Journal reported. Japan’s real gross domestic product expanded 2.2% on an annualized basis in the final quarter of 2024, compared with the 2.8% growth seen in preliminary estimates released in February, government data showed Tuesday. The economy grew 0.6% from the previous quarter.

Investors in Japanese corporate bonds are increasingly seeking protection against possible credit deterioration when an issuer becomes a takeover target, Bloomberg News reported. Change of Control covenants — which give bondholders certain rights to redeem the debt before maturity if the borrower has a significant change in ownership structure — have until now been very rarely seen in the ¥100 trillion ($680 billion) Japanese credit market.

Japan may see corporate bankruptcy cases hit an 11-year high in the fiscal year to March as some firms go under due to a lack of workers, a think tank survey showed, a sign of the strain intensifying job shortages are inflicting on the economy, Reuters reported. The survey highlights the cost felt by some firms from the Bank of Japan’s past efforts to reflate growth with easy monetary policy enough to tighten the job market and lift wages.

Japan’s ruling Liberal Democratic Party (LDP) has introduced a proposal aimed at significantly lowering the tax rate on crypto gains from the current maximum of 55% to 20%, CoinMarketCap.com reported. This proposal seeks to classify cryptocurrencies as a new asset class under the Financial Instruments and Exchange Act, thereby aligning the tax treatment of crypto with that of traditional securities. Currently, Japan categorizes crypto gains as miscellaneous income, subjecting investors to a steep tax burden.

Core consumer prices in Japan's capital rose 2.2% in February from a year earlier, data showed on Friday, slowing for the first time in four months due to revived energy subsidies but remaining well above the central bank's 2% target, Reuters reported. The persistently high inflation will likely support the case for the central bank to continue its monetary policy tightening campaign.