TOKYO, March 10 - Japan's economy grew more quickly in the final quarter of 2025 than first estimated, according to revised data released on Tuesday, with robust business investment the principal upward driver. The new figures raise the annualised pace of gross domestic product (GDP) growth for October-December to 1.3% from an initial 0.2% estimate, modestly exceeding economists' median forecast of 1.2%.
Measured without annualisation on a quarter-on-quarter basis, GDP expanded 0.3% in the fourth quarter, matching the median market expectation of a 0.3% rise and improving on the preliminary reading of a 0.1% increase.
Corporate capital expenditure posted a 1.3% gain in the October-December period, the strongest increase since the October-December 2023 quarter. This was revised up from an initial estimate of a 0.2% rise and outpaced economists' median projection for a 1.1% uptick. The upgrade to capital spending was the primary factor lifting the overall GDP revision.
Private consumption, which comprises more than half of Japan's economy, rose 0.3% in the fourth quarter, a small upward move from the preliminary 0.1% figure. External demand - defined as exports minus imports - remained unchanged from the preliminary assessment, which showed no contribution to GDP. Domestic demand was revised to contribute 0.3 percentage point to growth, up from a prior estimate of zero contribution.
The revised fourth-quarter expansion followed a 2.6% contraction in July-September and a 2.4% expansion in April-June. Japan's nominal GDP for the year was recorded at 663.8 trillion yen after the revision, equivalent to $4.20 trillion.
Additional monthly data released alongside the GDP revision showed household spending unexpectedly fell 1.0% in January from a year earlier, a negative signal for private consumption going forward.
Policy-makers have flagged the potential economic effects of higher fuel prices linked to the Iran conflict. Prime Minister Sanae Takaichi said on Monday that the government will consider measures to limit gasoline price increases in order to blunt the economic impact of rising fuel costs.
The Bank of Japan has not altered its stance on the prospect of raising interest rates if the economy evolves in line with its outlook. Governor Kazuo Ueda has cautioned that the possible hit to global growth from the Middle East conflict warrants vigilance from policy-makers.
($1 = 157.9300 yen)
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