Japanese companies sold a record amount of yen-denominated bonds targeting individuals this year, in the latest sign that sticky inflation is causing households to shift more of their $14.3 trillion of financial assets into riskier investments, Bloomberg News reported. The note sales climbed to about ¥2.76 trillion ($17.6 billion) as of Dec. 10, surpassing last year’s full-year record of ¥2.73 trillion, according to compiled data.

Japanese companies said strained diplomatic relations with China are their primary concern as they head into 2026, followed closely by U.S. trade policies, a Reuters survey showed on Thursday, Reuters reported. Ties between the Asian neighbours have deteriorated since Japanese Prime Minister Sanae Takaichi told parliament last month that a hypothetical Chinese attack on democratically governed Taiwan could trigger a Japanese military response.

Japan’s economy shrank in the three months through September, the government confirmed in a revised report, giving some justification for Prime Minister Sanae Takaichi’s stimulus package announced last month, Bloomberg News reported. Gross domestic product fell at an annualized pace of 2.3% in the third quarter, as revised figures showed business spending and housing investment came in weaker than preliminary figures. The contraction was deeper than the initial reading of a 1.8% fall, and was the first in six quarters.

Japan's economic revitalisation minister, Minoru Kiuchi, called on the central bank to closely communicate with the government in setting monetary policy on Friday, but did not voice opposition to a near-term interest rate hike, Reuters reported. Asked about growing prospects of an interest rate hike by the central bank in December, Kiuchi said that specific policy means was for the Bank of Japan to decide.

Japanese household spending unexpectedly slumped at the fastest pace in nearly two years in October, government data showed Friday, raising concerns about the economic outlook as the Bank of Japan gears up for a rate hike as early as this month, Reuters reported. Consumer spending fell 3.0% in October from a year earlier, internal affairs ministry data showed, the first decrease in six months and falling at the steepest pace since January 2024. It was worse than the median market forecast for a 1.0% rise.

Japan's financial regulator is moving to mandate that crypto exchanges in the country maintain liability reserves to protect customers from losses stemming from hacks and security breaches, Decrypt.com reported. The Financial Services Agency plans to submit legislation to parliament in 2026 that would require exchanges to set aside reserves for compensating customers in the event of losses from cyberattacks or other incidents, The Nikkei reported on Monday.

A massive ¥21.3 trillion ($136 billion) stimulus package was approved by the Cabinet of Prime Minister Sanae Takaichi on Friday, the Japan Times reported. It’s the largest stimulus package since the pandemic, although it’s smaller than it might have been, with some legislators earlier pushing for ¥25 trillion of support. The package includes ¥17.7 trillion of spending, ¥2.7 trillion in tax breaks and ¥900 billion in special account spending.

Japan's exports rose more than expected in October for a second straight monthly gain, government data showed on Friday, underpinned by a milder fall in U.S.-bound shipments, resilient demand in other key markets and a weaker yen, Reuters reported. "Although the outlook of exports to the U.S. remains uncertain, it can be interpreted that the impact of U.S. tariffs has been limited," said Takeshi Minami, chief economist at Norinchukin Research.

Bank of Japan board member Junko Koeda signaled that there could be a rate hike as soon as next month by pointing to the need for normalization, after the yen hit its lowest level in roughly 10 months, Bloomberg News reported. "Given that real interest rates are currently at significantly low levels, I believe that the bank needs to proceed with interest rate normalization,” Koeda said Thursday in a speech to local business leaders in Niigata Prefecture.