BOJ flags wider consumer price pressures as AI demand lifts output
The central bank improved its outlook for two Japanese regions, while reporting that cautious households were prompting some businesses to hold prices or offer discounts.
WTO upgrades goods trade outlook as AI demand bolsters Asia
The WTO expects Asia to contribute 4.0 percentage points to global goods trade growth in 2026, while conflict-related disruptions weaken the services outlook.
The World Trade Organization now projects 3.9% growth in global merchandise trade volumes for 2026, raising its March estimate of 1.9% as investment in artificial intelligence supports demand. The October 8 outlook puts growth in 2027 at 4.1% and says trade has withstood Middle East conflict disruptions better than expected.
Asia is forecast to contribute 4.0 percentage points to the global increase in 2026, with merchandise exports from the region rising 9.9%. Robert Staiger, the WTO’s chief economist, said the other regions combined would register a slight trade decline. The WTO projects export declines of 0.1% for Europe and 17.2% for the Middle East.
The WTO said AI-enabling goods, including servers and semiconductors, generated 47% of merchandise trade growth during 2026’s first half. Trade in those products increased 67% year-on-year. More than half of their global exports come from East Asian economies, including China, while Southeast Asia supplies about another quarter.
Merchandise trade volumes rose 3.5% during the first half. The WTO said supply chains adjusted to disruptions in energy and transport. Although Middle Eastern exports dropped about 24% for crude oil and 47% for liquefied natural gas, supplies from elsewhere helped limit global export declines to around 6% and 1%, respectively.
For commercial services, the WTO reduced its 2026 trade volume growth estimate from 4.8% in March to 3.3%, citing the conflict’s effects on travel and transport. It projects 6.4% growth in 2027. WTO Director-General Ngozi Okonjo-Iweala cautioned that exposure to the disruptions and access to AI opportunities were uneven.