Monthly Economic ReportExecutive Summary( jun 2026 )
(Provisional translation)
(Assessment of the current state of the Japanese economy)
The Japanese economy is recovering at a moderate pace, while attention should be given to the effects caused from the situation in the Middle East.
- Private consumption shows movements of picking up.
- Business investment is picking up.
- Exports have been showing movements of picking up recently.
- Industrial production is flat.
- Corporate profits show movements of improvement, while attention should be given to the effects caused from the situation in the Middle East.
- The employment situation shows movements of improvement.
- Consumer prices have been rising moderately.
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 continuously to the effects caused from the situation in the Middle East. Also, attention should be given to the effects of fluctuations in the financial and capital markets and so on.
(Policy stance)
The Government will strive to build a “Strong Japanese Economy” through the strategic employment of fiscal policies embracing an approach of “responsible and proactive public finances”.
The Government will restore strength to the Japanese economy while tackling rising prices and safeguarding people's daily lives. To this end, the Government will promptly implement Comprehensive Economic Measures approved by the Cabinet last November, the FY2025 supplementary budget, and the FY2026 budget. In addition, the Government will compile the "Basic Policies on Economic and Fiscal Management and Reform 2026 (provisional)" and other documents.
In response to the situation in the Middle East, in the near term, the Government has carried out emergency measures to curb dramatic fluctuations in the price of fuel oil. Through alternative procurement of crude oil and the release of oil stockpiles, the Government will work to ensure a stable supply of crude oil. The Government will also work to ensure a stable supply and the smooth distribution of critical materials. The Government will continue to respond to the situation in a flexible manner through utilizing the reserve fund established in the FY2026 supplementary budget.
On June 16th, the Bank of Japan decided to encourage the uncollateralized overnight call rate to remain at around 1.0 percent.
The Government and the Bank of Japan will continue to work closely together to conduct flexible policy management in response to economic and price developments.
The Government expects the Bank of Japan 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.