Japan
Wood Products Prices
Dollar Exchange Rates of 25th
August
2025
Japan Yen 147.77
Reports From Japan
Prefectures go their own way on minimum wage
The Japan Times has reported most Japanese prefectures
that have prepared their minimum wage plans for this year
and are breaking with a Ministry of Labour panel on the
level of increase. Most are opting for larger increases as
inflation is causing a decline in real incomes. A minimum
wage recommendation (plus 6%) was established by a
ministry panel for implementation by each of Japan’s 47
prefectures in the autumn
As of August, 28 prefectures determined their minimum
wage increases for this year and of those, 21 went above
the target. Minimum wage increases are a major economic
agenda item for the government which stresses the
importance of higher wages to support household finances.
When the ministry released the 6% increase target, Ken
Kobayashi, Head of the Japan Chamber of Commerce and
Industry (JCCI) which represents small and midsize
companies, said reaching that target would be “extremely
difficult” for smaller enterprises.
According to a survey in March this year by the JCCI,
around 20% of small businesses said it would be
“impossible” to make the increases needed to achieve the
governments minimum wage target, while 55% said it
would be “difficult.”
See:
https://www.japantimes.co.jp/business/2025/08/25/economy/min
imum-wage-prefectures/
Inflation slows but still above BoJ target
Core consumer inflation (measured in Tokyo) slowed in
August but stayed above the Bank of Japan’s (BoJ) 2%
target which analysts forecast could trigger an interest rate
increase.
The Tokyo core consumer price index (CPI), which
excludes volatile fresh food but includes fuel costs, rose
2.5% in August from a year earlier. It slowed from a 2.9%
rise in July due largely to government fuel subsidies that
pushed down utility bills. While consumer inflation has
been above 2% for well over three years BoJ Governor,
Kazuo Ueda, has stressed the need to move cautiously
while assessing the impact to the economy from U.S.
tariffs.
See:
https://www.japantimes.co.jp/business/2025/08/29/economy/toky
o-cpi-august/
Tight labour market expected to drive wage growth
Speaking at an event in the US, BoJ Governor, Kazuo
Ueda, indicated that Japan's tight labour market is
expected to continue driving wage growth. Wage increases
are spreading from large corporations to small and
medium-sized enterprises, he said.
He added, Japan faces demographic challenges with a
declining population and an aging workforce. Foreign
workers, while only 3% of the labour force, accounted for
over half of the labour force growth.
Ueda’s remarks are likely to support growing market
speculation of another interest rate increas this year
although he didn’t directly discuss monetary policy at the
event.
See: https://scanx.trade/stock-market-news/global/boj-governor-
ueda-signals-persistent-wage-growth-amid-tight-labor-
market/17562481
Rise in machinery orders a positive sign
In June the value of machinery orders received by a
sample 280 manufacturers operating in Japan increased by
0.3% from the previous month. In the April-June period
however, order values decreased by 5.3% compared with
the previous quarter. Private-sector machinery orders,
excluding volatile ones for ships and those from electric
power companies, increased by 3.0% in June and rose by
0.4% in April-June period.
In the July-September period the total value of machinery
orders is forecast to increase by 3.7% and private-sector
orders, excluding volatile ones, to decrease from the
previous quarter.
See: https://www.esri.cao.go.jp/en/stat/juchu/2025/2506juchu-
e.html
See: https://www.esri.cao.go.jp/en/stat/juchu/2025/2506juchu-
e.html
Consumer confidence ticks higher
Japan consumer confidence improved in August but
inflation expectations remain. The index for willingness to
purchase durable goods, which is included in the overall
index, also rose in August
Struggling yen – weakness persists
At the end of August the Japanese yen was down against a
basket of major and minor currencies continuing its losses
for the past three months.
Foreigners investing heavily in real estate
CBRE Japan, a commercial real estate services and
investments company, has reported real estate purchases in
Japan by foreigners came to 1.14 trillion yen (US$7.76
billion) between January-June, the highest for a first half
year going back to 2005. Office buildings accounted for
more than 40%. The growth is due partly to the
expectation of higher rents and greater profitability than in
Europe and the US.
See: https://asia.nikkei.com/business/markets/property/japan-
real-estate-purchases-by-foreign-investors-hit-record-high
July housing starts
July housing starts were down 10% year on year but
compared to June there was a 10% rise in starts.
TICAD 9 - catalysing Japanese private sector
investment in Africa
The latest of the three-yearly gathering of Japanese and
African leaders (TICAD 9) was held in Yokohama in
August. African Business has reported the summit
produced few headlines instead, the summit featured a
greater focus on solutions involving the private sector.
Xu Haoliang, Acting Administrator of the UN
Development Programme, said TICAD 9 featured
discussions “more serious than in the past” around
catalysing Japanese private sector investment in Africa.
Ankit Khandelwal, Mitsubishi UFJ Financial Group’s
Head of Africa development and blended finance said the
two key themes of this year’s TICAD were “to support the
private sector to drive growth and to support regional
connectivity in support of trade.”
See: https://african.business/2025/08/trade-investment/ticad-9-
japan-shifts-from-aid-to-trade-as-private-sector-prioritised
and
https://www.mofa.go.jp/files/100893431.pdf
Wooden office furniture imports (HS940330)
Four shippers accounted for over 95% of June arrivals of
wooden office furniture (HS940330). The other main
source of wooden office furniture imports was EU
member countries.
In June shippers in China accounted for 90% (86% in
May) of Japan’s imports of wooden office furniture the
other significant sources were Italy (2.5%), Malaysia
(2.0%) and Vietnam (1.5%). The value of imports from
Italy in June was around the same level as in May while
the value of June imports from both Malaysia and Vietnam
was down compared to May.
Year on year, the value of Japan’s imports of wooden
office furniture in June declined 16% and compared to a
month earlier the value of imports was down 30%.
Wooden kitchen furniture imports (HS940340)
As in previous months imports of wooden kitchen
furniture (HS940340) were dominated by shippers in the
Philippines (56% of HS940340 imports) and Vietnam
(24% of HS940340 imports).
June arrivals from the Philippines were up month on
month while the value of imports from Viet Nam was
below May values. The value of June arrivals from China
was below the value reported for May. Of note was the
sharp rise in the value of wooden kitchen furniture from
Italy.
Year on year there was a further decline in wooden
furniture imports (9%) but compared to a month earlier
there was a 3% increase in the value of imports.
Wooden bedroom furniture imports (HS 940350)
June 2025 marked the fifth month on month decline in the
value of wooden bedroom furniture imports into Japan.
The value of June 2025 imports was over 40% below that
reported at the beginning of this year.
The top two shippers of HS 940350 to Japan in June were
China, 61% of the total but this was down month on
month and Viet Nam, 24%, also down month on month.
Malaysia maintained a share of imports at 4% with both
Thailand and Indonesia having a 2% share of the value of
June imports.
Year on year there was a13% decline in the value of
wooden bedroom furniture in June and compared to May
arrivals in June were down 7%.
Wooden furniture parts imports (HS 940391)
Apart from the spike in the value of wooden furniture
parts (HS940391) imports in January, the monthly value of
imports remained steady during the first half of 2025.
The value of June 2025 imports was slightly higher
(7%)
than reported in May and compared to June 2024 there
was a 9% rise in the value of imports. Shippers in China,
Indonesia, Viet Nam and Malaysia accounted for most
(77%) HS940391 imports in June 2025. The value of
imports from the top two shippers, China and Viet Nam
was below that reported for May 2025.
Of the total value of HS940391 imports, 41% was
delivered from China (47% in May) 19% from Indonesia
(19% in May), 11% from Viet Nam (12% in May) and
Malaysia which secured a 6% share of June imports. The
value of imports of HS940391 from Italy and Germany
rose in June.
Trade news from the Japan Lumber Reports (JLR)
The Japan Lumber Reports (JLR) was not published in
mid-August as the country celebrated the Obon (Bon)
festival. Obon or Bon is the Japanese festival celebrated to
honour the dead and spirits of their ancestors.
See: https://www.jrailpass.com/blog/obon-festival-in-japan
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