AI Data Insight
Japan's seasonally adjusted changes in public inventories in Q1 2026 dropped to -94.9 billion yen, further expanding the magnitude of inventory depletion compared to -58.2 billion yen in the previous quarter. Despite the accelerated destocking trend in public inventories, supported by the recovery in private consumption and growth in public investment, the annualized GDP in the first quarter still grew by 1.8%, outperforming market expectations. Going forward, continuous attention is required regarding the impact of Middle East geopolitical tensions and the depreciation of the Japanese yen on subsequent government procurement and inflation.