Japan’s economy barely expanded at a 0.2% annual pace in the last quarter, with private consumption rising by 0.4% between October and December.<\/p>\n
The minor growth in consumption was offset by a 1.1% drop in exports, according to the latest seasonally adjusted preliminary data.<\/p>\n
Growth for all of 2025 came in at just 1.1% as Japan\u2019s export-reliant economy has been shaken by US President Donald Trump’s tariffs. On a quarterly basis, the economy grew only 0.1%, the Japanese government reported.<\/p>\n
The country narrowly avoided a technical recession which is defined by two consecutive quarters of negative growth. In the third quarter of last year, Japan’s economy contracted 0.7%, with revised data showing a 2.3% annualised decline.<\/p>\n
While technically not in a recession, the current numbers paint a bleak picture for the Japanese economy.<\/p>\n
In response, Japanese Prime Minister Sanae Takaichi is expected to roll out policies to help revive it after a landslide victory in the general election earlier this month.<\/p>\n
Takaichi has promised to spend more and to suspend Japan’s sales tax on food, among other measures.<\/p>\n
Related<\/p>\n
After Takaichi’s election victory, Japan\u2019s Finance Minister Satsuki Katayama sought to ease concerns about the country\u2019s debt and recent currency weakness, which many investors believe could prompt a rise in interest rates.<\/p>\n
Katayama suggested utilising foreign exchange reserves to fund national expenditures. Although possible, this approach can be challenging, as those reserves are usually used only for currency interventions.<\/p>\n
The interest rate in Japan currently stands at a 30-year high of 0.75% after the Bank of Japan (BOJ) hike last December.<\/p>\n
Takaichi has vowed to end “excessively tight fiscal policy” and the markets are waiting to see what the BoJ’s rate decision will be next month.<\/p>\n
The government projects the economy will expand at an average rate of about 0.6% in the near term.<\/p>\n","protected":false},"excerpt":{"rendered":"Japan’s economy barely expanded at a 0.2% annual pace in the last quarter, with private consumption rising by…\n","protected":false},"author":2,"featured_media":19979,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[1300,13,191,189,8,188,15834,190,358,426],"class_list":{"0":"post-19978","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bank-of-japan","9":"tag-donald-trump","10":"tag-economy","11":"tag-economy-of-japan","12":"tag-japan","13":"tag-japans-economy","14":"tag-japan39s-economy","15":"tag-japanese-economy","16":"tag-sanae-takaichi","17":"tag-satsuki-katayama"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/19978","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=19978"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/19978\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/19979"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=19978"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=19978"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=19978"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}