Japan in August 2026: the most important developments in economy
In August 2026 Japan's economy news was dominated by the yen. On August 3 the United States and Japan jointly intervened in currency markets for the first time since 1998, spending an estimated amount between $32 billion and $36.58 billion after the yen fell to a 40-year low against the dollar; it rose to about 155 per dollar. US Treasury Secretary Scott Bessent and Finance Minister Katayama warned of further joint action if weakness persisted. The yen later gave back much of its gain, surged on August 7 after weak US jobs data, and by August 11 slid toward 160. On August 12 a split between Bessent and Prime Minister Takaichi over the Bank of Japan's policy path was reported, and on August 13 the government was reported to back faster rate hikes. On August 28 Japan reported record intervention of $96 billion over the month, and the yen had fallen past 160 again.
Bond yields, inflation and growth drew attention. Growth in the second quarter missed expectations, and the 10-year government bond yield hit a 30-year high. The Nikkei fell 2.57% in morning trading on August 18 and dropped 2,134 points on August 19. Consumer price inflation accelerated in July, the Bank of Japan was reported to be set to raise its key rate to 1.25% in September, and debt service costs reached a record 36.6 trillion yen. Elevated oil prices pushed imports to a record, while exports grew at their fastest pace since 2022. Japan held off releasing oil reserves and announced support for pipelines that bypass the Strait of Hormuz.
Corporate investment centered on chips and AI. Sony and TSMC announced a $6.4 billion image sensor plant in Kumamoto, Kioxia and Sandisk a $31 billion production expansion, and the government an additional $940 million for Rapidus. SoftBank beat profit expectations, secured a $10 billion margin loan against its OpenAI stake and considered a bond sale of up to $20 billion. Toyota announced a $6.3 billion share buyback and raised its profit forecast.
by WorldBrief & Maksim Micheliov | AI-generated summary
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