Japan's Economy Sees Anemic Growth, Takaichi Pushes Spending

• Japan's Q4 2025 GDP grew a mere 0.2% annually, significantly below the 1.6% forecast, following a deep contraction.
• Consumer spending rose 0.1%, highlighting fragile domestic demand amid persistent inflation above 2% for four years.
• Inbound tourism, a key support in 2025, declined due to a Chinese travel warning after Takaichi's Taiwan comments.
• Prime Minister Sanae Takaichi, fresh off an election win, is expected to accelerate proactive government spending policies.
• The Bank of Japan is still likely to raise interest rates later this year despite the tepid economic recovery.