FX.co ★ Japan’s Capital Expenditure Rebounds Modestly in Q4 2025

Japan’s GDP capital expenditure returned to positive territory in the fourth quarter of 2025, rising 0.2% quarter-over-quarter after a 0.3% decline in the previous quarter. The latest data, updated on 15 February 2026, indicate a modest but notable improvement in corporate investment momentum.

In the third quarter of 2025, capital expenditure had contracted by 0.3% compared with the second quarter, signaling a temporary pullback in business spending. The Q4 2025 reading, measured against that weaker base, shows that firms slightly increased their investment outlays heading into the year’s end.

On a quarter-over-quarter comparison, the shift from negative to positive growth suggests a cautious recovery in corporate confidence. While the pace of expansion remains subdued, the reversal from contraction to growth in capital expenditure could be an early sign of stabilisation in Japan’s investment cycle as the economy moves into 2026.