Daiwa – Japan's Economy: Monthly Outlook, Feb 2025

The main theme of the report is the economic forecast for Japan in the coming years.

Key findings include a revised forecast for Japan's real GDP growth: +0.7% in the fiscal year 2024, +1.3% in 2025, and +1.1% in 2026. Steady growth in real wages and inflation at around 2% is expected. Japan's economy will be supported by improvements in household incomes, economic stimulus measures, growth in domestic demand, and high savings levels. Caution is needed regarding external factors such as the US administration's policy ('Trump 2.0') and significant yen appreciation. The Bank of Japan is expected to raise short-term interest rates to 0.75% during July-September 2025, with subsequent increases every six months.