Japan’s economy recorded a stronger expansion in the fiscal first quarter of 2025, according to revised government data released on September 8, 2025. Real gross domestic product (GDP), the combined value of goods and services, grew at an annualized pace of 2.2% from April to June. This exceeded the preliminary estimate of 1.0% and reflected improvements in consumer spending and inventories. Quarter-on-quarter growth reached 0.5%, higher than the initial figure of 0.3%. This marked the fifth consecutive quarter of positive performance, signaling steady economic momentum. The expansion is seen as vital since Japan remains heavily dependent on exports, particularly automobiles, at a time when the United States imposed higher tariffs of 15% from the previous 2.5%. Political uncertainty also emerged after Prime Minister Shigeru Ishiba announced his resignation as leader of the ruling party, prompting an election in the coming weeks.

Analysts indicated that the stronger performance of private consumption, rising 0.4% instead of 0.2%, shifted domestic demand into positive territory. Market reaction was cautiously optimistic as the Nikkei stock index advanced in early trading, which investors interpreted as a constructive step. However, questions remain about potential coalition arrangements and their policy direction. Experts explained that persistent trade issues and political shifts could create a precarious environment, although stronger demand offers a consolidated base for growth. Economists suggested that sustained expansion would require a multifaceted approach, balancing external risks with domestic reforms. Observers stressed that maintaining stability during leadership transition could play a pivotal role in future economic outcomes, while the government’s updated data provided a lucid picture of underlying strengths and vulnerabilities.