Japan

米国経済見通し 犠牲になるのは財政

Daiwa Institute of Research | Local Language | AcademicThink | Jan. 23, 2026 | UndeterminedBudgets-Budgeting

The U.S. economy is showing signs of recovery from the negative impacts of the recent government shutdown on both corporations and households, maintaining a firm hold. However, widening disparities within households could intensify due to the "K-shaped economy," as higher-income individuals benefit from federal income tax refunds under the 2025 Trump Tax Cut 2.0 beginning February 2026, while low- and middle-income groups face declining purchasing power following the expiration of Obamacare’s enhanced tax credits at the end of 2025, resulting in increased health insurance premiums.

Congressional debates over extending these tax credits have complicated the fiscal 2026 budget process. Democrats have made extending the tax credits a condition for budget approval, whereas Republicans have signaled reluctance for full extension, preferring a continuing resolution to delay decisions. This deadlock caused the longest government shutdown on record in October–November 2025. A continuing resolution passed in mid-November prolonged the debate, which gained momentum in early 2026. The House approved a three-year extension plan in January with Democratic leadership and support from 17 Republicans, particularly those in competitive districts, but the Senate Republicans remain cautious, leaving the bill’s future uncertain.

Criticism of the tax credit extension centers on the belief that the credits serve as subsidies to private insurers and would increase the federal deficit. The House-passed three-year extension would raise the fiscal deficit by about $80 billion over ten years, potentially increasing to $350 billion if made permanent. While extension would relieve financial pressure on low- and middle-income households, concerns persist that deteriorating fiscal conditions amid uncertain tariff revenues could elevate the term premium and push up U.S. 10-year Treasury yields. This rise in yields could negatively impact interest-rate-sensitive sectors such as capital investment, housing, and durable goods consumption.

２５年の貿易赤字２・６兆円 対米輸出は４・１％減

Tokyo Shimbun | Local Language | News | Jan. 23, 2026 | UndeterminedTrade Issues and Numbers

Japan recorded a trade deficit of 2.6507 trillion yen in 2025, marking the fifth consecutive year of deficit. However, the deficit decreased by 52.9% compared to the previous year. Exports to the United States declined by 4.1% to 20.414 trillion yen, the first drop in five years, largely due to high tariff measures imposed during the Trump administration. Notably, automobile exports to the U.S. fell 11.4%.

Globally, exports rose 3.1% to 110.448 trillion yen, the highest since 1979, supported by increased shipments of electronic components such as semiconductors to Asia and engines to the U.S. Imports increased slightly by 0.3% to 113.0987 trillion yen.

Other exports to the U.S. also decreased significantly, including semiconductor manufacturing equipment down 30.2% and automobile parts down 10.7%. Imports from the U.S. rose 1.6% to 12.8926 trillion yen, resulting in a U.S.-Japan trade surplus of 7.5214 trillion yen, though this surplus decreased by 12.6%.

On January 22, the yen traded in the low 158-yen-per-dollar range in the Tokyo foreign exchange market.

Nippon | English | News | Jan. 23, 2026 | Geopolitical Conflict and Disputes

Japan's Chief Cabinet Secretary Minoru Kihara described alleged espionage involving a former employee of Russia's trade representation in Japan as "regrettable." The individual was referred to Japanese prosecutors on suspicion of illegally obtaining trade secrets from a Japanese machine tool manufacturer, in violation of the unfair competition prevention law.

The Foreign Ministry communicated Japan's position on the incident to Russia. Kihara emphasized the importance of strictly addressing foreign agency activities to protect national interests and the safety of Japanese citizens. He also highlighted the need to enact legislation against espionage, as outlined in the coalition agreement between the ruling Liberal Democratic Party and the Japan Innovation Party.