Japan in May 2026: the most important developments in economy
Japan's economy in May 2026 was shaped by the cost of the war involving Iran and the closure of the Strait of Hormuz, which showed up in company results. Honda posted its first annual net loss since the 1950s after a 9 billion dollar writedown on its electric vehicle business, and dropped its aggressive EV sales targets. Toyota reported a 20 percent fall in annual profit and warned of a 4.2 billion dollar hit from the Middle East war; its April exports to the Middle East fell 91 percent, and it halted development of its next-generation EV. Sony announced a 3 billion dollar share buyback as memory prices weighed on its business. Nissan reported a large loss for the second year running and cut jobs in Europe. Supply problems reached everyday goods: snack makers Calbee and Nissin moved to plain packaging because naphtha shortages disrupted ink supply, and a plastic shortage was reported. Japan bought more oil from the United Arab Emirates and Russia, and the first tankers to exit Hormuz, including the Idemitsu Maru, arrived at the end of the month. The government approved 500 billion yen to subsidise household energy bills.
The weak yen was the second theme. Japan intervened in currency markets in April and May with about 73 billion dollars, or 11.7 trillion yen, its largest intervention since 1991, as confirmed on May 29; the yen still hovered near 160 per dollar. Japan said US Treasury Secretary Scott Bessent offered understanding on intervention. Long-term government bond yields passed 2.6 percent on May 14 and reached record highs by May 18. The economy grew faster than expected in the first quarter, wholesale prices rose 4.9 percent in April, and major companies agreed a record 5.46 percent wage increase. Markets expected the Bank of Japan to raise rates to 1.0 percent in June.
Investment in artificial intelligence lifted stocks. SoftBank reported quarterly net income of about 12 billion dollars, planned a battery venture for AI data centers and announced up to 75 billion euros of investment in French AI data centers. The Nikkei 225 hit records above 62,000 points during the month.
by WorldBrief & Maksim Micheliov | AI-generated summary
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