Once upon a time, the huge Japanese economy experienced shrinkage in the first quarter of 2025.
The Japanese economy narrowed last year in the first quarter of 2025. According to the pioneer data published, the real domestic gross domestic product of Japan decreased by 0.2 %compared to the previous quarter and showed the risk of technical degradation. In a survey conducted by economists quickly, the expectation of shrinkage 0.1 %appeared. In October to December 2024, the economy increased by 0.6 %. The Japanese economy dropped by 0.7 %on the first quarter of 2025. The result was amidst the concerns that Japan could harm the difficult economic recovery of the United States by reducing customs exports and withdrew their investments. Exports decreased by 0.6 %, while external demand increased GDP growth of 0.8 points due to an increase of 2.9 %. On the other hand, domestic demand contributes 0.7 points for growth. The cost of capital increased by 1.4 %compared to the previous quarter, while the special cost of horizontal monitoring. Thanks to its solid institutional benefits, companies have increased their investment steadily and provided a salary increase. Although food inflation has reduced the sensitivity between households, the higher salary is expected to help recover in consumption. Taro Saito, one of the researchers of the Research Institute, said that in a note that he announced before the statement on Friday, it seemed inevitable that domestic export and production would fall in April- June due to the US high customs duties of the United States, he said. Saito hopes that the economy will shrink again in the second quarter due to weak exports and stagnant domestic demand. “The cost of capital probably increased from the pre -tariff load of Trump. The economy could prevent negative growth in the period of April to June, but will lose momentum,” he said the Norinchukin Research Institute, the economist of Takehtub's economist, “Mr. Trump could raise interest rates.