The Japanese economy demonstrated a moderate recovery in the fourth quarter of 2025. According to preliminary government data, the country's gross domestic product grew by 0.2% year-on-year, when extrapolating quarterly growth to the full year. This is significantly lower than the expectations of analysts surveyed by Trading Economics, who forecast growth of 1.6%. For comparison, the Japanese economy contracted by 2.6% in the third quarter, while growth in the second quarter was 2.1%.

On a quarterly basis, GDP increased by only 0.1% after contracting by 0.7% in July–September. Experts had expected a more significant recovery of around 0.4%. Compared to the same period last year, the economy expanded by 0.1%, indicating ongoing constraints on the pace of expansion.

The growth structure also remains subdued. Personal consumption, which accounts for up to 60% of Japan's GDP, increased by 0.1% compared to the previous quarter, in line with market expectations. Public investment declined by 1.3%, while private investment showed a modest increase of 0.2%.

The foreign trade sector had a neutral impact on economic growth, with exports and imports both down 0.3% quarter-on-quarter. The data demonstrates a gradual stabilization following the downturn, but the pace of recovery remains below market forecasts.