AI Data Insight
In 2025, the contribution of Japanese household consumption to real GDP reached 0.7%, a significant recovery from 0.0% in 2024, indicating that domestic demand momentum has resumed growth after previous stagnation. Benefiting from wage increases of over 5% for two consecutive years, improvements in real income are gradually offsetting food inflation pressures; however, Q4 data shows that consumer confidence remains suppressed by price stickiness. Looking ahead, the results of the 2026 "Shunto" and potential fiscal stimulus will be key to sustaining domestic demand.