Japan’s Cabinet Office projects real GDP growth of 0.9% for the 2026 financial year (April 2026 to March 2027). Preliminary data for July 2026 indicates that Japan’s current cycle of economic growth may have become its longest period of economic expansion since the end of World War II, the current period beginning in May 2020 following COVID-19 pandemic lows.

Government projections for real GDP growth for the current financial year have been revised downward, with private consumption and corporate investment weaker than expected. Continued increases in real wages provide some cause for optimism.

The Bank of Japan raised interest rates to 1.25% on 18 September. Inflation remains above Japan’s 2% target rate, at 2.5%. Some economic commentators assess that the Bank of Japan may increase the speed of future rate rises, from approximately every six months to quarterly. Further interest rate increases should help address the weak yen.

For the year ending June 2026 New Zealand total exports to Japan grew by 6.4% to NZD 4.85bn. The value of aluminium and meat exports increased significantly due to rising commodity prices. Most other exports saw limited increases or declines. Imports from Japan increased by 20.4% to NZD 5.12bn, largely due to the increase in mineral fuel (mainly diesel) imports.