Japanese economy expands by 0.2% in last quarter of 2025

Japan's economy grew by 0.2% year-on-year in the October-December period, marking the first expansion in two quarters as personal consumption rose slightly despite inflation while exports fell after higher US tariffs reduced auto shipments, government data showed Monday.

Gross domestic product (GDP) adjusted for inflation increased by 0.1% in the fourth quarter of 2025 from the July-September period, according to a preliminary report by the Cabinet Office, Kyodonews reported.

The GDP expectation for the period was at 1.48%, according to economists polled by the Japan Center for Economic Research.

In real terms, GDP totaled 590.68 trillion yen ($3.85 trillion), up 1.1%.

Private consumption, accounting for over half of the economy, grew by 0.1% for the seventh consecutive quarterly rise in the reporting quarter, bolstered by robust demand for mobile phones and accommodation, though spending on food and automobiles declined.

Business investment increased by 0.2% from the previous quarter due to strong demand for semiconductor manufacturing devices and research and development services, while companies also bought more software to make up for labor shortages.

Housing investment increased by 4.8% from the previous quarter following a sharp fall of 8.4%.