Japan's Economy Seen Testing Further Growth in 2026

Tokyo, Jan. 2 (Jiji Press)--After staying on a moderate recovery path in recent years, the Japanese economy is expected to test its further growth in 2026.

The current phase of economic expansion began after the economy bottomed out in May 2020. If the current expansion lasts until July this year, it will surpass the Izanagi boom, which spanned 73 months from February 2002 to February 2008, the longest such period since the end of World War II.

However, the Japanese economy faces uncertainties, including those stemming from higher U.S. tariffs under President Donald Trump and the Chinese government's advisory for its citizens to refrain from visiting Japan.

Moreover, private consumption, a pillar of domestic demand, has lost luster due to inflation, suggesting that people are not actually feeling the benefits of the economic recovery.

In 2025, households were squeezed by rising prices, especially rice prices, which soared to record highs amid a suspected supply shortage since 2024. Rice prices temporarily dropped after the government released its stockpiled rice, but they rebounded as the distribution of newly harvested rice began.

[Copyright The Jiji Press, Ltd.]