The government expects its interest payments on outstanding debt to roughly double over the next four years as the Bank of Japan’s gradual rate hikes push up borrowing costs, Bloomberg News reported. Interest payments are projected at ¥21.6 trillion ($139 billion) in the year starting April 2029, up from the current year’s budgeted ¥10.5 trillion, according to a Finance Ministry document released Thursday. The projections assume annual nominal economic growth of 3%. Overall debt-servicing costs are seen rising about 46% to ¥41.3 trillion during the same period.
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China banned the export of critical minerals and other goods with potential military uses to several major Japanese companies, further escalating its pressure campaign against Tokyo over remarks Prime Minister Sanae Takaichi made about Taiwan, the Wall Street Journal reported. The new measures, announced by China’s Commerce Ministry Tuesday, show Beijing isn’t backing down in its dispute with Japan, even after Takaichi won a resounding victory in a recent parliamentary election.
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China banned the export of critical minerals and other goods with potential military uses to several major Japanese companies, further escalating its pressure campaign against Tokyo over remarks Prime Minister Sanae Takaichi made about Taiwan, the Wall Street Journal reported. The new measures, announced by China’s Commerce Ministry Tuesday, show Beijing isn’t backing down in its dispute with Japan, even after Takaichi won a resounding victory in a recent parliamentary election.
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The Bank of Japan may raise interest rates as soon as March if the yen renews its slide ahead of a U.S.-Japan summit expected to be held during the month, former central bank board member Makoto Sakurai told Reuters. Prime Minister Sanae Takaichi is expected to visit Washington for a meeting with U.S. President Donald Trump around the time the BOJ holds its next policy meeting on March 18-19.
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Japan's annual core consumer inflation hit a two-year low to match the central bank's 2% target in January, data showed on Friday, suggesting weakening price pressure that could complicate its decision on how soon to raise interest rates, Reuters reported. A separate index seen as a better indicator of underlying inflation also slowed but remained well above the Bank of Japan's target, suggesting that solid wage gains will keep the central bank on course to push up still-low borrowing costs.
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The International Monetary Fund urged Japan to keep raising interest rates and avoid loosening fiscal policy further, warning that trimming the consumption tax would erode its capacity to respond to future economic shocks, Reuters reported. The recommendation came as dovish Prime Minister Sanae Takaichi's landslide election win heightens market attention to whether she will push back against further rate hikes by the central bank. It also follows Takaichi's pledge to suspend by two years an 8% consumption tax on food sales.
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Japan's economy barely expanded at a 0.2% annual pace in the last quarter, with private consumption rising by 0.4% between October and December, Euronews.com reported. The minor growth in consumption was offset by a 1.1% drop in exports, according to the latest seasonally adjusted preliminary data. Growth for all of 2025 came in at just 1.1% as Japan’s export-reliant economy has been shaken by US President Donald Trump's tariffs. On a quarterly basis, the economy grew only 0.1%, the Japanese government reported.
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The Bank of Japan could raise key interest rates again as early as March and deliver up to three hikes this year in light of persistent inflation and yen weakness, Mizuho Financial Group's markets chief told Reuters on Thursday. With the yen having weakened and inflation continuing to run above the BOJ's target, "we can expect as many as three rate hikes this year, and it's entirely possible that the next one could come as early as March or April," Kenya Koshimizu, co-head of the lender's global markets division, said.
Japan's bankruptcy cases rose in January as companies struggled with rising labour costs in a tight job market, a private survey showed on Monday, a sign of how increasing pay was hitting smaller firms, Reuters reported. Separate data showed real wages fell 0.1% in December from a year earlier, much slower than a 1.6% drop in November, as inflation eased and workers saw a steady gain in bonuses. Bankruptcy cases rose 5.6% in January to 887 from a year earlier, the highest level for the month in 13 years, a survey by private think tank Tokyo Shoko Research shows.
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Japanese companies are not obliged to accept unsolicited takeover bids even when offered large premiums, an industry ministry official told Reuters, amid growing concern about the targeting of leading firms by activist investors and foreign acquirers. Corporate Japan has seen a wave of unsolicited takeover offers since the country's powerful industry ministry introduced a code of conduct for mergers and acquisitions three years ago to crack down on excessive defensive tactics and encourage healthy industry consolidation.