Strong consensus on positive GDP growth for 2026 underpins the 95.5% market-implied probability against recession, with forecasters including the IMF, OECD, and Japan’s Cabinet Office projecting 0.8–1.0% expansion for the calendar year. Recent data reinforce this view: Q2 real GDP rose 0.4% quarter-on-quarter (1.4% annualized) after upward revision, unemployment holds near 2.5%, and real wages posted solid gains amid tight labor markets. The Bank of Japan’s shift to a 1.25% policy rate reflects its pivot toward containing inflation overshoots rather than stimulating demand, while domestic consumption and business investment remain resilient. Tail risks include sharper energy-price spikes from Middle East tensions or an abrupt global slowdown that could compress exports and capex.