Japan’s Economy in 2026: The Comeback Nobody Expected? | Insight

For the fourth year in a row, real wages in Japan have dropped in 2025.

The country has struggled with long-running economic stagnation, marked by weak GDP growth, persistent deflation, and a weak yen. But there are recent signs of revival. The Nikkei has hit record highs, and wages are rising.

The catalyst is the landslide election victory of Prime Minister Sanae Takaichi, who has championed “Sanaenomics”—a mix of proactive fiscal spending, structural reforms, and stimulus to boost growth.

Yet internal and external headwinds could stall this economic momentum.

The public, particularly the young, have pinned their hopes for an economic revival on the new government. Will Prime Minister Takaichi’s decisive mandate translate into a new era of growth, or will these signs of life sputter out?

WATCH MORE Insight: https://www.youtube.com/playlist?list=PLkMf14VQEvTYAVU8dsviDcQ4WbQ6D66T6

00:00 Introduction
03:09 Japan’s Lost Decades explained
05:43 Signs of Japan’s economy rebound
07:01 Why everything feels more expensive in Japan
08:32 Some businesses struggle to survive
13:28 Why wages haven’t increased in Japan
22:21 PM Takaichi’s plan to fix the economy
29:33 Why Japan’s economic recovery may falter
33:02 War and Japan’s relations with US and China
38:28 Japan’s debt, ageing population, policy limits
42:48 Can Japan really turn things around?

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