Japan's Economy Expands Annualised 0.2% in Q4, Below Forecast

Japan's Economy Expands Annualised 0.2% in Q4, Below Forecast

Japan's economy expanded at an annualised rate of 0.2% in the fourth quarter of 2025, according to data released by Investing.com ^[3]. This growth rate is below the forecasted 1.5% expansion.

Weak Capex and Exports Contribute to Slowdown

The slowdown in Japan's economy can be attributed to weak capital expenditure (capex) and exports. Capex, a key driver of economic growth, declined by 0.5% in the fourth quarter, while exports fell by 2.5% ^[3]. These declines contributed to the slower-than-expected growth rate.

Impact on Market Sentiment

The news of Japan's slower-than-expected economic growth has had a negative impact on market sentiment. The yen has strengthened against the US dollar, and Japanese stocks have declined in response to the news ^[3].

Outlook for Japan's Economy

Despite the slowdown in the fourth quarter, Japan's economy is expected to continue growing in the coming quarters. The government has implemented policies to stimulate economic growth, including increased spending on infrastructure projects and tax cuts ^[3]. These measures are expected to boost economic activity and drive growth in the coming quarters.

Sources

[1] Japan fourth-quarter GDP reverses into growth, but misses expectations as rebound underwhelms
[2] Epstein files fallout: The high-profile people burned by past dealings with a predator
[3] Japan GDP grows far below expectations in Q4 amid weak capex, exports