Anxiety over U.S. tariffs has been spreading across Japan, a central bank report shows, sending a worrying signal about the corporate outlook as trade uncertainty deepens, the Wall Street Journal reported. At a branch managers’ meeting held Thursday, the Bank of Japan’s local heads said that growing worries over higher U.S. tariffs have turned companies cautious about investment plans. Orders from the U.S. have also declined for some companies, a summary of the meeting showed.
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The number of corporate bankruptcies in Japan in the first half of 2025 rose to the highest level in 11 years, with those hurt by a labor shortage showing a notable increase, a survey by a credit research company showed Tuesday, Japan Today reported. The failures involving debts of at least 10 million yen were up 1.2 percent from the same period a year earlier, rising for the fourth consecutive year and reaching their highest level since 2014, according to Tokyo Shoko Research.
Sentiment in Japan's service sector improved slightly in June, a government survey showed on Tuesday, as solid demand for summer clothing and leisure offset the gloom from U.S. tariffs, Reuters reported. But corporate bankruptcy cases in the first half of this year rose 2.4% from a year earlier to hit a 12-year high of 5,003, a survey by private think tank Teikoku Databank showed, as rising raw material and labour costs hit margins. The batch of data highlight the fragile nature of Japan's economy, which is expected to see the strain from U.S.
U.S. President Donald Trump on Monday set a 25% tax on goods imported from Japan and South Korea, as well as new tariff rates on a dozen other nations that would go into effect on Aug. 1, the Associated Press reported. Trump provided notice by posting letters on Truth Social that were addressed to the leaders of the various countries. The letters warned them to not retaliate by increasing their own import taxes, or else the Trump administration would further increase tariffs.
The Bank of Japan should resume interest rate hikes following a temporary pause to evaluate the impact of U.S. tariffs, board member Hajime Takata said, signalling optimism the country was on track to durably achieve the central bank's price goal, Reuters reported. Takata said that Japan was close to achieving the BOJ's 2% inflation target with robust corporate profits and labour shortages driving up wages and building price pressures. While the BOJ must take its time scrutinising the fallout from U.S.
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After failing to cut a trade deal with Japan following weeks of talks, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer decided to turn up the pressure. When Japanese officials arrived in Washington in late May, Lutnick and Greer warned them that if the two sides couldn’t work out an agreement soon, the conversations might start shifting from easing the tariffs President Trump had recently imposed toward additional punitive measures, according to people familiar with the matter.
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Japan’s industrial production increased modestly in May, but the rebound is likely to be temporary due to the impact of U.S. tariffs and concerns over a global slowdown, the Wall Street Journal reported. Industrial production rose 0.5% in May from the previous month, after declining 1.1% in April, data released by the Ministry of Economy, Trade and Industry showed on Monday. The May reading was much weaker than the 3.5% increase expected in a poll of economists by data provider Quick.
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Consumer inflation in the Tokyo metropolitan area eased in June but remained firmly above the Bank of Japan’s 2% target, leaving the central bank balancing on a policy tightrope, the Wall Street Journal reported. Core consumer prices in Tokyo—excluding fresh food—climbed 3.1% in June from a year earlier, compared with May’s 3.6% increase, government data showed Friday. That was lower than the 3.3% rise expected in a poll of economists by data provider Quick. Tokyo figures are considered an early indicator of nationwide trends.
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Japan is driving Asia's M&A rebound in 2025 with a record $232 billion worth of deals in the first half, and bankers expect the trend to sustain fuelled by multi-billion dollar take-private arrangements, outbound investments and private equity activity, Reuters reported. Management reforms to tackle chronic low valuations among Japanese firms are spurring a flurry of foreign and activist investor interest, while Japan's low interest rates - which support deals - mean the appetite for more deals remains strong, bankers say.
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Japan’s chief trade negotiator Ryosei Akazawa said the country can’t accept the U.S.’ 25% tariffs on cars, adding that the Asian nation’s automakers produce far more cars in the U.S. than they export to America, the Japan Times reported. Japanese automakers make roughly 3.3 million cars in the U.S. a year, a number that’s far larger than the 1.37 million that they ship there, Akazawa told reporters on Thursday before he left for Washington, D.C. to hold his seventh round of trade negotiations with U.S. counterparts. The companies have invested more than $60 billion in the U.S.
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