Glossary

Japan-specific and finance terms, defined in plain English. These definitions describe what a term means; they are not advice.

Annualized rate: An annualized growth rate takes a single quarter's change and projects it over four quarters. Japan often reports GDP growth this way, which makes a small quarterly move look larger (e.g. +0.5% quarterly ≈ +2.0% annualized).
Central rate (FX): The Bank of Japan publishes a daily "central rate" for USD/JPY in the Tokyo market, alongside spot rates observed at 9:00 and 17:00 JST. The central rate is a single reference figure for the day.
Constant-maturity yield: Because individual bonds age over time, the Ministry of Finance publishes "constant-maturity" reference yields for standard maturities (1, 2, 5, 10, 20, 30, 40 years, etc.). These are reference rates, not the price of any single traded bond.
Core CPI (Japan): Japan reports three main inflation measures: "All items" (headline), "core" which removes fresh food (whose prices are volatile), and "core-core" which removes both fresh food and energy. The Bank of Japan watches core and core-core closely. Note this differs from the United States, where "core" already excludes both food and energy.
Core-core CPI: The "core-core" index strips out fresh food and energy to show underlying price trends that are less affected by volatile commodity and weather-driven prices. It is closest to what the US calls "core" inflation.
GDP (Gross Domestic Product): Gross Domestic Product measures the total value of everything produced within Japan in a given period. "Real" GDP is adjusted for inflation. Japan's quarterly estimates are produced by the Cabinet Office and are revised as more data arrives.
Industrial production (IIP): The Indices of Industrial Production measure the volume of goods produced by mining and manufacturing, rather than their value, so they are not affected by price changes. METI sets the index to 100 in a base year (currently 2020) and rebases it about every five years. It is a timely gauge of the real industrial economy.
JGB (Japanese Government Bond): Japanese Government Bonds are debt securities issued by the Ministry of Finance. The yield on a JGB is the annual return an investor earns if they hold it to maturity, and it serves as a benchmark for interest rates across the economy. The 10-year JGB yield is the most-watched maturity.
Labour force: The labour force is the part of the population aged 15 and over that is economically active — either employed or unemployed-but-seeking-work. Students, retirees, and others not looking for work are outside the labour force. The labour-force participation rate is the labour force as a share of that population.
M2 (money stock): M2 is a broad measure of the money supply — currency in circulation plus demand and time deposits at domestic banks. The Bank of Japan also publishes M1 (narrower) and M3 (broader). Economists watch the growth rate of money stock as one input among many.
M3 (money stock): M3 includes everything in M2 plus deposits held at a wider range of financial institutions (such as the postal savings system). It is the broadest of the Bank of Japan's commonly cited money-stock aggregates.
Policy rate: The Bank of Japan implements monetary policy by steering the uncollateralized overnight call rate — the rate at which banks lend to each other overnight without collateral. This chart shows that rate as a proxy for the policy stance.
Real vs nominal: A nominal figure is measured in the prices of the day. A real figure is adjusted for inflation, so it reflects changes in volume rather than price. Real GDP growth tells you whether the economy produced more, not just whether prices rose.
Seasonally adjusted: Many economic series follow predictable seasonal patterns. Seasonal adjustment removes those recurring swings so that the underlying trend and turning points are easier to see and compare period-to-period.
Trade balance: The trade balance is the value of goods a country sells abroad (exports) minus the value of goods it buys from abroad (imports) in a given period. A positive balance is a trade surplus; a negative balance is a trade deficit. Japan’s figures here cover merchandise (goods) recorded at customs, and exclude services.
Trade value (yen basis): Trade statistics here are measured as the value in yen of goods crossing the border, not the number of units or their weight. Because of this, a change in the exchange rate moves the recorded value: when the yen weakens, the same quantity of imports costs more yen, and export values rise too. Japan Customs also publishes separate price and volume indices for those who want to separate the two effects.
Uncollateralized overnight call rate: The "call market" is where banks lend each other very short-term funds. The uncollateralized overnight rate is the headline rate in this market and is the Bank of Japan's main operating target for monetary policy.
Unemployment rate: The unemployment rate is the number of people who are without a job and actively seeking one, divided by the labour force (those working plus those looking). In Japan this is the 完全失業率 ("completely unemployed" rate) from the Labour Force Survey, covering people aged 15 and over. People who are not looking for work are outside the labour force and not counted as unemployed.
Yield curve: The yield curve plots the yield of bonds (here, JGBs) against their time to maturity. Its shape — upward sloping, flat, or inverted — summarises the relationship between short- and long-term interest rates at a point in time.