Despite facing pressure from U.S. tariffs, Japan’s economy exhibits a modest recovery according to the latest reports. The government acknowledges potential impacts on corporate profits and overall economic growth. 24% tariffs imposed by the US on July are looming large, with an ongoing effort to secure exemptions for carmakers. The country also seeks to mitigate rising prices and their impact on consumer confidence. Economic indicators show a decline in GDP during the first quarter of 2025, further highlighting the precarious economic situation. The Ministry of Finance has emphasized that corporate earnings are showing signs of recovery as confirmed by Q1 business statistics. However, uncertainties regarding trade policies continue to pose a significant challenge for Japan’s economy and Prime Minister Ishiba’s growth strategies. Further analysis suggests delayed effects in the second quarter, but the impact of US tariffs remains uncertain.