Japan Economy Expands at Annualized 1.3% in Q4

2026-03-10 00:17 By Farida Husna 1 min. read

Japan’s economy advanced at an annualized pace of 1.3% in Q4 2025, much stronger than the initial estimate of a 0.2% expansion and slightly above market forecasts of 1.2%.

The revised figure marked a rebound from a 2.6% contraction in Q3, supported mainly by firmer domestic demand.

Private consumption remained resilient despite persistent cost-of-living pressures, while government spending accelerated, partly reflecting Tokyo’s recent fiscal stimulus aimed at easing household burdens and supporting economic activity.

Business investment also rebounded solidly after stagnating in the previous quarter, signaling improved corporate spending.

Meanwhile, net trade did not contribute to growth, as both exports and imports remained in contraction, amid softer demand at home and abroad and lingering uncertainty after the September trade deal with the U.S.

imposing a 15% baseline tariff on most Japanese goods.



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Japan Economy Expands at Annualized 1.3% in Q4
Japan’s economy advanced at an annualized pace of 1.3% in Q4 2025, much stronger than the initial estimate of a 0.2% expansion and slightly above market forecasts of 1.2%. The revised figure marked a rebound from a 2.6% contraction in Q3, supported mainly by firmer domestic demand. Private consumption remained resilient despite persistent cost-of-living pressures, while government spending accelerated, partly reflecting Tokyo’s recent fiscal stimulus aimed at easing household burdens and supporting economic activity. Business investment also rebounded solidly after stagnating in the previous quarter, signaling improved corporate spending. Meanwhile, net trade did not contribute to growth, as both exports and imports remained in contraction, amid softer demand at home and abroad and lingering uncertainty after the September trade deal with the U.S. imposing a 15% baseline tariff on most Japanese goods.
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