Japan’s economy has posted three consecutive quarters of expansion through Q2 2026, with the latest reading revised higher to +0.4% quarter-on-quarter and +1.4% annualized, supported by resilient business investment, net exports, and government spending. Consensus forecasts from the OECD, Cabinet Office, and private institutions project real GDP growth of 0.8–1.0% for calendar or fiscal 2026, driven by AI-related semiconductor demand, wage gains amid tight labor markets, and sustained capital expenditure. These factors underpin the 95.5% market-implied probability against recession, reflecting traders’ assessment of data-backed resilience over historical base rates of contraction. Tail risks include sharper energy price spikes from Middle East tensions or intensified global trade frictions that could tip growth negative, though current indicators show limited probability of such outcomes.