Abstract. The year 2024 became neither a milestone nor a turning point for the Japanese economy: the contradictory dynamics of the main components of aggregate demand did not allow to secure the desired GDP growth, and the prospects for 2025 remained uncertain. Despite the fact that inflation has significantly exceeded the target, the government and monetary authorities do not consider the “deflationary trap” to have been completely overcome, as they see the predominant role of external factors in rising prices. The official task of giving dynamism to the economy by initiating a positive cycle of income and price growth remains unfulfilled. The change of leader in the main party of the Japanese establishment which have lost its majority in the lower house of parliament did not lead to significant changes in the domestic political agenda. Reforming the mechanisms of electoral funds, promoting transparency in their financing and administration to exclude misuse, remains the subject of heated discussion. The focus is also on the details of government’s stimulus packages to protect consumers and support demand, alleviate the situation of vulnerable categories of small businesses, optimize labor market, and expand employment. Other topics for discussion include the digitalization of public services, changes in the financing of public education and healthcare; issues of economic and cybersecurity. Japan’s foreign policy priorities mainly relate to its self-assigned mission of a regional outpost of the collective West in East Asia and the Indo-Pacific region. At the same time, relations with the United States as the key partner are evolving to become more pragmatic and focused on moderating conflicting elements of visions by the two sides.