Key Facts
• Japan’s GDP grew 1.0% annually in Q2 2025, marking five consecutive quarters of growth.
• Real GDP increased by 0.3% compared to the previous quarter.
• Exports rose by 2%, driven by U.S.-bound car exports despite tariff challenges.
• Japanese automakers absorbed tariff costs, maintaining export volumes.
• Consumer spending, accounting for 60% of GDP, saw growth due to record heat boosting summer clothing sales.
• While dining out decreased, overall personal consumption remained positive for five quarters.
Summary
Japan’s GDP for Q2 2025 grew by 1.0% on an annualized basis, marking the fifth consecutive quarter of positive growth. The Cabinet Office reported a 0.3% real GDP increase from the previous quarter. Export growth, particularly in U.S.-bound automobiles, played a significant role, with Japanese automakers offsetting tariff costs to sustain export volumes. Consumer spending, which constitutes 60% of GDP, also contributed to the growth. Record-breaking heat spurred demand for summer clothing, offsetting declines in dining out. These factors collectively supported Japan’s continued economic recovery.
