Asia Week Ahead: Key Growth Data From Japan

Why It Matters

The results will shape market sentiment on Japanese risk assets and guide investors on the trajectory of the nation’s recovery and monetary policy.

Key Takeaways

• Q4 2025 GDP expected 0.3% QoQ rebound.
• Exports buoyed by strong semiconductor demand.
• Inflation projected to drop to 1.5% YoY.
• Construction recovery as safety regulation effects fade.
• Supplementary budget impact visible Q1 2026.

Pulse Analysis

Japan’s upcoming data release is a pivotal moment for analysts tracking the country’s post‑pandemic recovery. The modest 0.3% GDP rebound projected for Q4 2025 suggests that the temporary drag from tightened safety regulations in construction is waning, while a supplementary budget slated for early 2026 could provide a further boost. Investors will scrutinize the export numbers, especially the semiconductor segment, as they reflect Japan’s role in the global tech supply chain and its resilience amid broader geopolitical tensions.

The semiconductor export outlook ties directly to broader Asian demand dynamics. Robust chip orders from the United States and Europe have kept Japan’s manufacturing sector buoyant, offsetting weaker performance in other tradable goods. Coupled with a favorable calendar effect and a low base from the previous year, January trade data is likely to show a pronounced export surge. This trend reinforces the view that Asian exporters, particularly those tied to high‑tech components, will continue to benefit from sustained global demand, even as China’s domestic consumption shows signs of moderation.

On the inflation front, the anticipated drop to 1.5% YoY reflects the combined effect of government energy subsidies and stabilising food prices, providing the Bank of Japan with room to maintain its accommodative stance. A cooler price environment, paired with political stability after the LDP’s landslide victory, should support risk‑on sentiment across equity markets. For portfolio managers, the convergence of modest growth, strong export performance, and easing inflation presents a nuanced risk‑reward profile that may encourage increased allocation to Japanese equities and corporate bonds.

Asia week ahead: Key growth data from Japan

13 February 2026 · Updated 5 hours ago · Min Joo Kang · Senior Economist, South Korea and Japan

Japan will release key growth data next week, including GDP and exports. Inflation data will also be released.

---

Asia Research highlights of the week

• China’s CPI inflation slowed in January amid Lunar New Year effect

• The LDP’s landslide victory in Japan is positive for risk assets

• Taiwan’s blistering export growth continues in 2026

---

Japan: Data expected to show growth in Q4 2025

We look for a modest rebound in GDP in the fourth quarter of 2025 (0.3 % quarter‑on‑quarter, seasonally adjusted) after a –0.6 % contraction in 3Q25. Construction activity is expected to recover as the temporary effects of safety‑regulation changes subside, while exports are expected to strengthen due to robust demand for semiconductors. The influence of supplementary budget expenditures should become more pronounced in the first quarter of 2026. No significant impact from the China‑Japan disputes is expected in the fourth‑quarter 2025 data.

January trade data reinforces our view that global chip demand remains robust, and Asian exporters would see the most benefits from it. The favourable calendar effects and low base last year should exaggerate the headline exports in January. With stable politics and strong chip demand, manufacturing and services PMI should rise.

Meanwhile, inflation is expected to cool quite sharply to 1.5 % year‑on‑year compared to the previous months’ 2.1 %, thanks to government energy subsidies and the stabilisation of food prices. We expect inflation to slow down further in the coming months.

---

Key events in Asia next week

Image placeholder for upcoming events chart

---

Content Disclaimer

This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more