world-economy

Japan Extends Growth Run as Global Economy Shows Mixed Signals

Japan is approaching its longest uninterrupted economic expansion since World War II. This resilient performance is buoyed by manufacturing activity, even as households face mounting pressures from elevated energy costs tied to regional conflicts.

The world's third-largest economy is navigating a divergent global landscape. Manufacturing has expanded at its fastest pace since 2021, with production gains offsetting weakness in service sectors across multiple economies. Meanwhile, central banks remain cautious about inflation trajectories despite some recent moderation in energy prices.

European inflation has begun retreating toward target levels, with French price growth recently returning to the European Central Bank's 2% objective. However, policymakers remain vigilant about underlying cost pressures, signaling that monetary policy normalization may continue despite softening energy markets. Geopolitical tensions continue to cloud the outlook for sustained growth.