FX.co ★ Japan’s Economy Faces Setback: GDP Declines by 0.2% in Q1 2025

In a turnaround for Japan's economic trajectory, the nation’s GDP contracted by 0.2% in the first quarter of 2025, according to the latest data updated on 15 May 2025. This marks a significant decline from the preceding quarter's 0.6% growth rate, reflecting a quarter-over-quarter analysis.

This shift in Japan’s GDP figures suggests emerging challenges amid ongoing global economic uncertainties. In the fourth quarter of 2024, Japan experienced growth at a rate of 0.6%, indicating positive economic momentum. However, the first quarter of 2025 has now reversed this trend, recording a contraction in economic activity.

The drop in GDP highlights potential vulnerabilities in Japan's economy as it navigates various challenges, including fluctuating global markets and domestic economic pressures. The data underscores the importance for policymakers and businesses to adapt to changing conditions and implement strategies that can stabilize and sustain growth in the coming quarters. Stakeholders are likely to keep a close watch on further developments to gauge potential recovery trajectories.