Takata sees Japan's inflation target almost achieved, eyes price upswings

Global economic activity is gaining momentum, with the International Monetary Fund (IMF) revising its global growth forecast upward in January 2026, offsetting earlier concerns.

The US economy, despite initial fears over reciprocal tariffs from April 2025, has shown limited negative impact, supported by improved IT corporate profits and firm consumption.

Amid an employment slowdown, the Federal Reserve cut its policy interest rate in September, October, and December 2025.

Takata noted a shift in US policy from a "north wind" (pressure-based) to a "sun" (persuasion-based, with tax cuts and deregulation) approach in 2026.

This synchronized global adoption of expansionary monetary and fiscal policies, coupled with a worldwide AI investment boom, is expected to significantly uplift economic activity, with markets beginning to factor in potential policy interest rate hikes by some central banks.

Japan's economy has shown resilience, with US tariff policy impact proving smaller than initially anticipated.

Corporate profits for fiscal 2025 are projected at high levels, and wage increases in the 2026 spring negotiations are likely to remain substantial for a third consecutive year.

This trend is expected to establish a new norm for wages.

Private consumption has remained resilient, supported by improved employee income despite weak consumer sentiment due to price rises.

The inflation rate has recently been above 2 percent, driven by food prices.

Medium-to-long-term inflation expectations continue to rise steadily, further supported by a 6 percent increase in the national minimum wage benchmark for fiscal 2025.