FX.co ★ Japan Housing Starts Drop Less than Expected

In December 2025, Japan experienced a 1.3% year-on-year decline in housing starts. This represents a significant improvement from the 8.5% drop seen in the previous month and surpasses market predictions of a 4.1% decrease. Although this marks the eighth contraction within the year, it is the smallest decline since September 2024. Contributing to the reduced decrease were smaller declines in owner-occupied home starts (-1.8% compared to -9.5% in November) and rental units (-3.4% compared to -5.5%). Contrarily, there was a resurgence in built-for-sale housing, which ventured back into growth at 1.9% compared to a prior decline of -11.3%, along with a rebound in two-by-four homes at 2.8% compared to -2.7%. However, prefabricated housing experienced a sharper contraction at -6.1%, compared to -4.1% previously.