Japan GDP Growth Annualized

Japan’s economy grew by 2.2% on an annualized basis in Q2 2025, exceeding the initial estimate of 1.0% and sharply accelerating from a downwardly revised 0.3% increase in Q1. It was the fifth straight quarter of annual growth and the fastest pace since Q3 2024, boosted by solid private consumption as government measures helped cushion cost pressures from rising food—particularly rice—and energy prices. Capital spending also rose for the third quarter, supported by expectations of monetary tightening, stronger investment in labor-saving technologies, digitalization, and supply chain diversification. Net trade contributed positively, lifted by a sharp rebound in exports as firms front-loaded shipments to the U.S. ahead of the newly imposed 15% blanket tariffs. Economists warn that tariff headwinds could intensify in the coming quarters, while growing political uncertainty after Prime Minister Shigeru Ishiba’s resignation may complicate policymaking.