BOJ reports with the latest data on Japan's output gap

Japan

The Q2 output gap in Japan has slumped to -4.83%, falling into negative territory for the first time since 2016. The output gap generally measures the difference between the economy's actual output and its potential output.

Just before Q2, Japan's output gap has been expanding for thirteen consecutive quarters but has been losing momentum as noted at the start of the year here.

If anything, this just highlights the struggle faced by the economy at the height of the virus crisis and that it is going to be a tough challenge to find a meaningful inflation lift.