The Bank of Japan’s Research and Statistics Department has published updated estimates of Japan’s output gap and potential growth rate after reviewing its estimation methods to reflect the re-basing of GDP statistics to the 2020 base year and recent changes in economic structure. It also began quarterly publication of labour market indicators to complement output-gap monitoring in assessments of economic and price developments. The output gap is positioned as an indicator of the aggregate supply and demand balance, but the Bank notes that labour input and labour market tightness have become increasingly influential for activity in labour-intensive sectors and for price trends amid intensifying labour supply constraints. The new labour market indicators are intended to support forecasting of wages and prices and are published alongside the output gap and potential growth updates on the Bank’s Output Gap, Potential Growth Rate, and Labor Market Indicators webpage. In principle, the estimates are released on the third business day in January, April, July, and October. A Bank of Japan research paper provides further detail, with an English version under preparation.
Bank of Japan 2026-03-26
Bank of Japan updates output gap and potential growth estimates and begins quarterly labour market indicator publications
The Bank of Japan's Research and Statistics Department has updated estimates of Japan's output gap and potential growth rate, reflecting GDP re-basing to the 2020 base year and economic structural changes. It has also initiated quarterly publication of labour market indicators to enhance output-gap monitoring and economic assessments. These updates aim to improve forecasting of wages and prices amid labour supply constraints.