Prime Minister Takashi Highlights Economic Growth and Price Stability in New Year’s Address — Latest Trends in Stock Market and Yen Exchange Rate

Prime Minister Takashi’s New Year’s Press Conference

On January 5th in the afternoon, Prime Minister Takashi held a New Year’s press conference where he emphasized the importance of **strong economic growth**. He outlined plans to boost investments through increased tax revenues and create a positive cycle of growth and prosperity [1].

According to government economic forecasts, inflation is expected to reach **1.9%** in 2026, edging closer to the 2% target. Nominal GDP growth is projected at **3.4%**, with real wages expected to grow by **1.3%** [1].

Yen Exchange Rate Movements and Market Response

On January 5th, the Tokyo foreign exchange market saw the yen weaken against the dollar, driven by optimism about the resilient U.S. economy. The yen depreciated by about **1 yen**, closing around 156.85 yen per dollar [2][4].

With the Nikkei stock average set to open for the year, analysts are optimistic that 2026 will be a turning point for ending deflation and establishing a stable inflation environment. The Nikkei closed last year in the 50,000-yen range, and a continued upward trend is expected [3].

Key Economic Indicators Outlook

• Inflation rate: 1.9% in 2026 (down from 3% in 2024)
• Nominal GDP growth: 3.4%
• Real wage growth: 1.3%
• Core CPI is expected to dip slightly to -0.1% due to free education policies [1]

Public and Private Investment Strategies

Prime Minister Takashi announced plans to leverage over **$100 billion in public support** through industrial infrastructure initiatives and encourage **more than $500 billion in combined public-private investments**. The goal is to increase economic certainty and accelerate growth [1].

Market analysts are also predicting a sustained bull run in Japanese stocks through 2027, with hopes of balancing out the current AI-focused investment trend [3].

International Developments and Their Impact

Discussions between Japan and the U.S. are underway, with potential impacts on currency and trade policies. Meanwhile, international news such as India’s GDP rising to the world’s 4th largest and Russia’s territorial occupation in Ukraine (0.7%) could influence global markets [2].

Some commentators warn of risks related to further yen depreciation but note that current prospects for sharp declines are limited [2].