The Japanese Cabinet Office has announced a slight recovery in the country's GDP for the 2025 October to December period, showing a 0.1% increase from the previous quarter after two quarters of negative growth. This growth has been attributed to a 0.1% rise in personal consumption, which accounts for over half of the economy. Despite this, the consumption momentum appears weak, with exports lagging due to ongoing impacts from tariffs imposed by the Trump administration. Notably, spending on home electronics such as mobile phones and air conditioners contributed positively, while sales of automobiles and food, which have been facing price increases, experienced declines.

Housing investment has increased by 4.8%, reflecting a rush in demand before new energy conservation regulations are introduced in April 2025. However, a subsequent downturn was noted prior to this period, and the current levels of investment remain low primarily due to rising costs of building materials and difficulties in land acquisition. Additionally, inbound tourism is experiencing a slump, further exacerbating economic recovery efforts. Overall, these mixed economic signals indicate that while there are areas of growth, significant challenges remain, particularly in consumer spending and export recovery, raising concerns about a broader 'K-shaped economy' developing in Japan that favors certain sectors over others.