Deutsche Bank forecasts Japan’s economy will grow 1.2% in 2025, underscoring the country’s resilience even as global trade frictions persist. Analysts highlight that a weaker yen has cushioned Japanese automakers by enabling them to reprice exports, offsetting tariff impacts and preventing wider supply-chain strains.

Core-core inflation is running above 3%, and while Deutsche expects a gradual slowdown, it argues the Bank of Japan remains “behind the curve.” The bank projects the BOJ will restart rate hikes in October, though the outcome could hinge on the ruling Liberal Democratic Party’s presidential election on October 4.