We've adopted our "limited Trump scenario" as our baseline outlook for Japan. We've upgraded our GDP growth outlooks by 0.1ppt to 0.7% in 2026 and 0.6% in 2027 due to better export prospects. We believe the benefits generated by a stronger US economy under fiscal stimulus will outweigh the wedge from assumed 10% tariffs on Japan's autos and metals exports to the US.
Japan: Targeted tariffs will have a limited impact on growth