#JapanEconomy
Japan's economy in the last quarter of 2025: Can the weak yen and massive stimulus save it?
November 23, 2025
Japan enters the economic winter with a mix of hope and anxiety:
Third quarter: contraction -1.8% (first decline in 6 quarters)
Fourth quarter (forecast): return to growth +0.4% to +0.6%
What is happening now?
A historic stimulus package of $135 billion approved on November 21
→ Support for electricity and fuel bills, tax cuts, and increased defense spending
Wages are rising at the strongest pace in 30 years
→ Labor shortages are forcing companies to pay more, and consumption is holding up
The yen at 156 against the dollar
→ It inflates the import bill but makes Japanese cars and electronics cheaper abroad
U.S. tariffs (15%) are still hurting exports
→ But their impact is gradually fading
Bank of Japan: Potential rate hike in December from 0.5% to 0.75%
→ 53% of analysts are betting on it
Summary in three words:
Fragile recovery… but it is coming.
2026 could be the first year in decades that Japan sees real wage growth + inflation above 2% + natural interest rates, provided that external crises do not explode.
Japan has not emerged from the jungle yet, but it is starting to see light at the end of the tunnel.
