AI Data Insight
Japan's real GDP annual growth rate reached 1.1% in 2025, a significant recovery from 0.1% in 2024, indicating the economy has shaken off the stagnation of the previous year. However, the latest fourth-quarter data reveals an annualized growth rate of just 0.2%, far below the market consensus of 1.6%, primarily due to inflation continuing to suppress private consumption and weak automobile exports. Looking toward 2026, the market is focused on whether "Shunto" wage increases can repair real purchasing power to support a mild recovery led by domestic demand.