Monthly Economic ReportExecutive Summary( sep 2025 )
(Provisional translation)
(Assessment of the current state of the Japanese economy)
The Japanese economy is recovering at a moderate pace, while the effects caused from the U.S. trade policies are seen mainly in the automotive industry.
- Private consumption shows movements of picking up.
- Business investment is picking up moderately.
- Exports are almost flat.
- Industrial production is flat.
- Corporate profits improvement appears to be pausing, while the effects caused from the U.S. trade policies are seen mainly in the automotive industry.
Firms' judgments on current business conditions have been almost flat. - The employment situation shows movements of improvement.
- Consumer prices have been rising.
Concerning short-term prospects, the improvement in the employment and income situation and the effects of the policies are expected to support a moderate recovery, while attention should be given to downturn risks of the Japanese economy due to the impact of the U.S. trade policies are increasing. In addition, the effects of continued price increases on private consumption through a downturn in consumer sentiment are also downside risks to the Japanese economy. Also, continued attention should be given to the effects of fluctuations in the financial and capital markets.
(Policy stance)
In light of the deal between Japan and the United States on July 22, the Government will continue to take all possible measures to response U.S. tariff measures, and will continue to ensure the provision of all essential support for economic and fiscal management. Based on the "Basic Policy on Economic and Fiscal Management and Reform 2025: Toward a Society in which People can Feel “Tomorrow will be Better than Today”, the Government will make effort to implement a “Growth-Oriented Economy Driven by Wage Increases and Investments”.
To this end, the Government will promptly implement the “Comprehensive Economic Measures to Foster the Safety and Security of Citizens and Sustained Growth－Increasing Current and Future Wages and Incomes for All Generations－”, the FY2024 supplementary budget, and the FY2025 budget. Moreover, the Government will implement the "Emergency Response Package to U.S. Tariff Measures", which was decided on April 25th.
On September 19, the Bank of Japan decided to sell exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) it holds to the market.
The Government and the Bank will continue to work closely together to conduct flexible policy management in response to economic and price developments.
The Government expects the Bank to achieve the price stability target of two percent in a sustainable and stable manner, while confirming the virtuous cycle between wages and prices, by conducting appropriate monetary policy management in light of economic activity, prices and financial conditions.