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Japan’s Preliminary Q4 GDP Edges Up on Investment, Misses Forecasts

The rebound rests on investment gains with consumer demand still soft.

Overview

  • Real GDP grew 0.1% quarter on quarter in October–December 2025, equal to a 0.2% annualized pace and the first positive reading in two quarters.
  • Business equipment investment rose 0.2% and housing investment jumped 4.8% after earlier policy timing effects depressed building activity.
  • Private consumption increased just 0.1%, with strong mobile phone and home electronics sales offset by weak new‑car purchases as higher food prices sustained a saver mindset.
  • Exports fell 0.3% and spending by inbound tourists declined 0.6%, including a pronounced drop in Chinese visitors in December.
  • The flash result came in well below the private‑sector consensus of +0.4% q/q (+1.6% annualized), while 2025 nominal GDP hit a record ¥662.8 trillion and real GDP rose 1.1%.