Japan Stronger Than Expected Exports Support June BOJ Hike

Stronger-than-expected 14.8% export growth and hawkish central bank signals have led ING to forecast a 25bp BoJ rate hike in June. Despite energy supply shocks from the Middle East, Japan's manufacturing and capital expenditure outlook remain resilient.

Key Takeaways

• 1.Japan's exports rose 14.8% YoY in April, significantly exceeding the 9.2% market consensus, driven by chips and machinery.
• 2.Hawkish signals from BoJ board member Junko Koeda suggest underlying inflation may exceed 2%, supporting a policy shift.
• 3.ING forecasts a 25 bp interest rate hike from the Bank of Japan in June 2026.

Table of Contents

• Japan's stronger-than-expected exports support a June BoJ hike
• Exports increased for major products and markets, especially to the EU and China
• Exports firmly rose in May with notable growth in semiconductors and machineries
• Japan increased US energy imports quite sharply, but only partially replaced Middle East supply shortages
• Energy imports from the Middle East plunged in May
• Machinery orders grew in 1Q26, suggesting a steady capex investment in 2Q26
• BoJ watch
• Stronger hawkish voices from BoJ officials

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