Japan economy at a glance

Latest figures for Japan: inflation, growth, interest rates, jobs, bond yields, debt and taxes. Updated 6 November 2026. Open Japan on the interactive map →

Key figures

Indicator	Latest	Period	Previous
Inflation (consumer prices, year on year)	2.1%	September 2026	1.9% August 2026
Core inflation (excluding food and energy)	2.1%	September 2026	1.7% August 2026
Real GDP growth (year on year)	0.9%	Q2 2026	0.6% Q1 2026
Policy rate (Bank of Japan)	1.25%	November 2026	1.25% October 2026
Unemployment rate	2.4%	September 2026	2.5% August 2026
10-year government bond yield	3.05%	September 2026	2.94% August 2026
Manufacturing PMI (S&P Global Japan Manufacturing PMI)	53.3	October 2026	54.1 September 2026
Retail sales (year on year)	2.3%	September 2026	2.9% August 2026
Industrial production (year on year)	1.9%	September 2026	2.7% August 2026
Wages (year on year)	5.3%	Q2 2026	3.5% Q1 2026
Stock market (Nikkei 225)	57,435	November 2026	+14.3% over 12 months

Questions and answers

What is the inflation rate in Japan?

Japan's annual inflation rate was 2.1% in September 2026, up from 1.9% in August 2026.

What is the interest rate in Japan?

The Bank of Japan guideline for the uncollateralized overnight call rate is 1.25% (as of November 2026). The next rate decision is due on 18 December 2026.

How fast is Japan's economy growing?

Japan's real GDP grew 0.9% year on year in Q2 2026. The IMF's October 2026 World Economic Outlook forecasts growth of 0.7% in 2026 and 0.7% in 2027.

What is the unemployment rate in Japan?

Japan's unemployment rate was 2.4% in September 2026, down from 2.5% in August 2026.

What is Japan's 10-year government bond yield?

Japan's 10-year government bond yield averaged 3.05% in September 2026.

How much government debt does Japan have?

Japan's government debt is about 204.8% of GDP (latest annual figure), with a budget deficit of 0.7% of GDP.

What is the VAT rate in Japan?

Japan's standard VAT rate is 10% (2026 rules).

What is the corporate tax rate in Japan?

Japan's corporate income tax rate is 29.7% (2026 rules).

Who leads Japan?

Japan is led by Sanae Takaichi, Prime Minister (head of government); Emperor Naruhito (head of state). Next election: No national election scheduled; next regular House of Councillors election due mid-2028 (lower house can be dissolved at any time).

Outlook

Growth is modest (real GDP up 0.9% y/y in Q2 2026), but wage gains, a tight labour market and inflation the BOJ sees as near 2% support further normalisation; markets and some board members expect another hike, possibly by December (per Trading Economics coverage of BOJ comments). Upside: stronger pay and capex tied to the AI cycle. Downside: an AI-led equity correction (Nikkei fell from its June record), fiscal worries pushing JGB yields higher, and weak consumption if real wages stall.

Why Japan matters for the world economy

Japan matters most to the world through its capital: as the largest creditor nation, rising JGB yields (now near 3%) and further BOJ hikes raise the chance that Japanese investors bring money home, which would put upward pressure on US, European and Australian bond yields and unwind yen-funded carry trades. The yen exchange rate also feeds into competitiveness for Korea, Taiwan, Germany and China in autos, machinery and electronics. In real terms, Japan is a key supplier of chipmaking equipment, materials and components to Taiwan, Korea, China and the US, so its exporters (Tokyo Electron, Advantest and others) are closely tied to the global AI investment cycle.

Politics

Prime Minister Sanae Takaichi leads a government that favours an expansionary fiscal stance, and markets are focused on how much new debt Tokyo will issue; in October 2026 she pledged to manage annual JGB issuance 'appropriately' to calm bond investors. The key economic-policy tension is between government support for growth and a Bank of Japan that has raised rates three times since December 2025, pushing 10-year JGB yields to around 3%.

System: Parliamentary constitutional monarchy.

Economy and taxes

GDP: US$4,453 billion
Population: 123.3 million
Government debt: 204.8% of GDP
Budget balance: −0.7% of GDP
Current account: 4.7% of GDP
Exports: 22.0% of GDP
Main exports: Motor vehicles and parts, semiconductor-making equipment and chips, industrial machinery, electronic components, steel, chemicals, optical and medical instruments
IMF growth forecast: 0.7% in 2026, 0.7% in 2027
IMF inflation forecast: 2.0% in 2026, 2.6% in 2027
Currency: JPY
Freelancer tax: A self-employed person earning the average wage (JPY 5,590,000 a year) pays about 32.2% of it in income tax and social contributions (2026 rules)
Top income tax rate: 56.0%
Gold reserves: 846.0 tonnes (September 2026)
Energy self-sufficiency: 13% (2024)

Recent news

4 November 2026 Nikkei sinks to a five-month low as AI doubts and US election fears hit tech shares Trading Economics
The Nikkei 225 fell as much as 4.8% during the day to about 60,030, its lowest in five months, and closed 1.8% lower at 61,945. Doubts about the AI trade and worries that early US midterm results could bring tighter tech rules hit chip stocks; the index is down about 10% in a month.
2 November 2026 Japan's factory growth slows to a seven-month low Trading Economics
The S&P Global manufacturing PMI fell to 53.3 in October from 54.1, the softest expansion since March, as output and new orders grew at their slowest pace in seven months. Input costs rose faster, while firms raised their own prices more slowly.
30 October 2026 Bank of Japan holds at 1.25% as one board member pushes for a hike Bank of Japan
The BOJ kept its policy rate at 1.25% in an 8-1 vote. Board member Hajime Takata wanted a rise to 1.5%, arguing underlying inflation has reached the 2% goal. The bank also agreed to sell its stock ETFs more than twice as fast, at about ¥860bn a year from January 2027.
30 October 2026 Japan's jobless rate unexpectedly falls to 2.4% Trading Economics
Unemployment eased to 2.4% in September from 2.5%, as the number of jobless fell by 100,000 and employment reached a four-month high. There were 1.19 jobs for every applicant, up from 1.18, a sign the labour market remains tight.
30 October 2026 Japan's factory output growth slows to 1.9% in September, missing forecasts Trading Economics
Industrial production rose 1.9% from a year earlier in September, down from 2.7% in August and below the 3.1% economists expected. Output did rebound 2.2% from the previous month after a 2.4% monthly drop.
23 October 2026 Japan's core inflation rises above the BOJ's 2% target for the first time in nine months Trading Economics
Consumer prices excluding fresh food rose 2.1% y/y in September, up from 1.7%, and headline inflation also reached 2.1%. A gauge that also strips out energy jumped to 2.4%, strengthening the case for another BOJ rate rise even as government subsidies held down electricity bills.

Headlines and summaries are compiled daily from the linked reports with AI assistance.