Japan’s economy expanded at an anemic 0.2 percent annualized pace in the October to December quarter, according to government data released Monday in Tokyo, as export weakness offset modest domestic demand and left full-year 2025 growth at 1.1 percent. Private consumption increased 0.4 percent during the quarter, but exports declined 1.1 percent amid global trade tensions and new tariffs imposed by United States President Donald Trump. Prime Minister Sanae Takaichi, who secured a landslide victory in a recent general election, signaled plans to introduce stimulus measures, including higher public spending and a suspension of the sales tax on food, in an effort to bolster confidence and prevent further contraction.

The Cabinet Office reported that gross domestic product rose 0.1 percent quarter on quarter after shrinking 0.7 percent from July to September, allowing the country to narrowly avoid a technical recession defined by two consecutive quarters of decline. Growth earlier in April to June had reached 0.5 percent before weakening. The 1.1 percent expansion marked the fastest pace since 2022, when recovery followed pandemic disruptions, yet the government projects average growth of about 0.6 percent in the near term. Economists say sustained export recovery and stable consumption remain critical for longer-term stability.