FX.co ★ Japan’s Economy Rebounds: Annualized GDP Swings from -2.3% to 1.3% in Q4 2025

Japan’s economy returned to growth in the fourth quarter of 2025, with annualized GDP rising 1.3% quarter-over-quarter, according to data updated on 09 March 2026. The improvement marks a sharp reversal from the previous quarter, when GDP contracted at an annualized rate of -2.3% in the third quarter of 2025.

Measured on a quarter-over-quarter annualized basis, the latest reading reflects a meaningful turnaround in momentum. The current figure compares the change in output in the fourth quarter to the third quarter of 2025, while the earlier -2.3% reading captured the shift from the second to the third quarter of 2025. Taken together, the data indicate that Japan moved from a phase of contraction back into expansion by the end of the year. Investors and policymakers will now be watching whether this recovery can be sustained in subsequent quarters.