AI Data Insight
Japan's industrial production grew by 4.1% YoY in Q3 2026. Although slightly decelerating from the previous Q2 2026 reading of 4.2%, it strongly beat market expectations of 3.3%. A surge in the production of AI and semiconductor manufacturing equipment offset the impact of Middle East geopolitical tensions on certain traditional industries. The resilient manufacturing performance has further boosted market expectations for the Bank of Japan to raise interest rates again in September.