Japan's economy narrowly avoids recession with 0.1% growth
Business
Japan's economy squeaked by with 0.1% growth in late 2025, narrowly avoiding a recession after shrinking the previous quarter.
This was way below what experts hoped for, and annual growth landed at just 0.2%—a far cry from the expected 1.6%.
Full-year growth in 2025
Even with the slow finish, Japan's full-year growth was up 1.1% in 2025—thanks to small upticks in spending and business investment.
But exports dropped, with US tariffs cited as a key drag on goods exports; diplomatic tensions with China have also weighed on the economy.
What is the way forward?
Prime Minister Sanae Takaichi is looking at ways to help out after elections, like pausing food sales tax or adding extra budget support, hoping these moves will boost spending at home while trade pressures linger.