GS: BOJ's April Branch Managers' Meeting

Regarding regional economic assessments, all regions reported that their respective economies had been “recovering moderately,” “picking up,” or “picking up moderately,” although “some weakness has been seen in part". This assessment of economic conditions based on micro information aligns with the BOJ’s macro assessment from the March Monetary Policy Meeting statement (“Japan’s economy has been recovering moderately, although some weakness has been seen in part.").

At the same time, regarding the Middle East situation, the report noted that reduction in operating rates due to rising input costs and supply constraints on raw materials has begun to be observed. Going forward, the report noted voices of concern over negative impact on corporate profits and personal consumption, and the possibility of supply constraints spreading throughout the entire supply chain. The report summarized that these developments will be monitored carefully, considering the potential for downward pressure on regional economies.

Regarding the major demand components, on personal consumption (including inbound demand), the BOJ noted that spending for special occasions remains firm, while also reporting consumers’ persistent thrifty stance, mainly at super markets. On capex, the report noted that positive investment stance is being maintained.

Regarding this year’s wage hikes, the BOJ noted there were many companies planning to provide FY2026 wage hikes at a similar level to FY2025, from the perspective of securing and retaining personnel, and given the spread of high-level wage hikes comparable with FY2025 at large corporations. On the other hand, the report introduced voices noting the possibility of a more cautious wage-setting stance depending on the future development of the Middle East situation.