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Japan Economy Shrinks: GDP Misses Forecasts
8 Dec, 2025
Summary
- Japanese economy contracted more than estimated last quarter.
- Annualized GDP declined 2.3 percent in the September quarter.
- Nikkei index closed up 0.18 percent after a volatile session.
The Japanese economy experienced a contraction in the last quarter, exceeding initial estimates. This downturn was largely attributed to a significant weakness in capital spending, impacting the nation's Gross Domestic Product. The annualized GDP figure for the three months concluding in September showed a decline of 2.3 percent, falling short of the anticipated 2.0 percent decrease.
Despite the economic contraction, the stock market demonstrated resilience. The Nikkei average closed with a modest increase of 0.18 percent, settling at 50,581.94. Similarly, the broader Topix index finished the session 0.65 percent higher, indicating a mixed but ultimately upward trend for major indices. However, investor sentiment remained cautious regarding the sustainability of the AI-driven market rally.
Notable market movements included significant gains for Fujikura, which jumped 7 percent, and Fuji Electric, surging 4.1 percent. Conversely, big tech stocks displayed mixed performance, with SoftBank Group experiencing a notable tumble of 3.3 percent amidst ongoing market fluctuations.
