AI Data Insight
Japan's nominal GDP inventory change for Q1 2026 reported -2839.3 billion yen, widening significantly from the previous value of -335.7 billion yen, marking the deepest drop for the same period in recent years. Although the overall GDP maintained positive growth benefiting from consumption, supply chain bottlenecks caused by the Middle East war and the contraction of corporate capital expenditure became the main drivers for the sharp drop in inventories. In the short term, companies face strong pressure to restock, while in the medium term, caution is needed regarding inflation's interference with the normalization of the BOJ's monetary policy.