I’m a week late and others have already given you some good answers, so here are some quick thoughts.

• compact has two components: the body itself and the lens
• smaller sensors usually result in smaller bodies, but some modern micro four thirds cameras cameras use full frame bodies (looking at you Panasonic) and some full frame bodies like Sony’s A7c are very compact
• Lenses designed for smaller sensors will be more compact for an equivalent focal length, but you’ll only maximize the size benefits if you get a lens designed for the sensor. For example, you can put full frame glass on an APS-C sensor and it will fully function but if you can find an APS-C native lens it will be smaller. This is actually a strike against Canon, Nikon, and, to a lesser extent, Sony as their current mounts are biased towards full frame glass
• Low light has two main components: how slow you can let your shutter go and your lens aperture. If your subject is still you need not worry much about low light assuming you can keep the camera steady via stabilization hand holding or a tripod/monopor. If your subject is moving you’ll need to gather light more quickly. There are two ways to gather light more quickly: more sensor surface area and a wider aperture lens. A full frame sensor generally gives you a two stop advantage in terms of noise, so say a f/1.4 lens on a micro four thirds camera would yield similar results as a f/2.8 lens on a full frame body
• If you consider the prior bullet you can actually make a pretty compact full frame setup. An A7c with sonys 50mm f/2.5 lens is nearly as small as a GM5 with Panasonic’s 25mm f/1.4 lens and the two will achieve pretty similar low light performance. This won’t hold up if you want more reach though. I’m lugging an A9ii around with Tamron’s 150-500 and it’s way bigger than my old D5300 + 70-300 despite similar equivalent focal lengths
• Some of the most compact cameras are out of production. The greatest camra ever made is a GM5 and it fits your form factor well. The smallest interchangeable lens camera I’ve personally owned was a Nikon J5
• Older cameras absolutely still take great photos but tend to give up video capability

I was happy with the performance of my D5200 so it’s a good benchmark and should be easy to beat i think

The amount of ISO you can get out of somewhat newer/higher tier sensors is great. A fast lens on your D5200 would probably help a ton with low light, but being able to push 12,800 ISO combined with a fast lens means that I don’t own a flash for my current body. As a bonus, mirrorless lenses are generally more compact than their DSLR counterparts

For the trip we currently just have our phones which are an iPhone 16 Pro and a Google Pixel 5a 5G that both take pretty decent casual photos. The camera I’m looking for doesn’t need to replace that, but needs to offer significantly better image and video quality.

Cellphones take totally serviceable photos and video given adequate lighting, slow subjects, and “normal-range” focal lengths. I still use a dedicated camera because I have kids that…

• like lower light situation, especially during the winter. Think museums and other indoor attractions, the holiday displays at the local zoo, etc
• play sports. You need both good autofocus and reach for this. I’ve been defacto team photographer for four seasons now

I also find that a dedicated camera puts me in a more creative mood.

I am late, but I’d avoid Fuji:

• No HDR HEIF shooting. This is a huge IQ loss for sharing the photos on smartphones/TVs.

• Funky autofocus

• Not-so-accurate out of camera colors.

• Questionable video features.

• X-Mount is… okay, but native lenses are very expensive.

I actually went WAAAY down this rabbit hole, in your exact situation, and got a Canon R50V… but I’m going to sell it. I could ramble on about why, if you wish, but in short my recommendation would be:

• Wait until after May-June-July 2026, when the Canon R7 Mark II drops. Pick up a used Mark 7 I for pennies on the dollar. Pair it with a Yongnuo 23mm prime lens, and an 85mm for subjects/portraits, as these are light and (TBH) the only sanly priced RF lenses out there: https://th.hkyongnuo.com/collections/lens

• For a flat lens, get the Canon RF 28mm, used. Its a good one.

Alternatively, push your budget and buy the best Sony crop body you can afford. The A6700 is absolutely worth it if you can swing it in Japan:

And pair with a set of two of any of these lenses, your preference:

• The Sirui Sniper 16 or 75, not other focal lengths: https://store.sirui.com/products/sirui-sniper-series-16-75mm-f1-2-aps-c-frame-autofocus-lens-set

• The Yongnuo 23mm 1.4, not other focal lengths.

• Any of the Vilitrox Air series: https://viltrox.com/collections/air-series-lens?filter.v.price.gte=&filter.v.price.lte=&filter.p.tag=APS-C&sort_by=created-descending

To summarize, a firesale R7 I is your cheap option. It will be a steal when the R7II releases. A Sony body is your “reach” but has better upgradability down the line due to the better, cheaper, lighter lens ecosystem.

Some points:

• Prime lenses are too good not to use. They’re dirt cheap, and suck up gobs of light compared to a zoom. They’re so sharp you can just crop and get a great image. Don’t make the mistake I made: skip the zooms.

• I repeat: you arent shopping for a camera, you are shopping for a lens ecosystem. This is the most important thing.

• IBIS is incredible, as it unlocks a whole world of ultralight, sharp, dirt cheap prime lenses you can stabilize perfectly. It’s worth reaching for an R7 or A6700 just for that, as it will save you so much cash in lenses, and you’ll curse at yourself later if you don’t.

• The A6700 is particularly incredible for video because it supports downsampled 4k60 and has the best phone connectivity. It also supports gyroflow directly, even with IBIS enabled. You can transcode videos right on your smartphone and get them as smooth as silk: https://gyroflow.xyz/

• The R7 is a better “stills” camera, as it can auto-level with its IBIS along with some other nicities. It’s still excellent at video, as it can shoot downsampled 4K30 in HDR. but it doesn’t support Gyroflow video stabilization. The big caveat is the overpriced Canon lens ecosystem (which is why you pair it with Yongnuos) and its rather buggy phone app. It’s chunkier, yes, but not heavy at all with a light (~320 gram) prime lens.

Again, I’ve been researching this for months, and there are a zillion different reasons I recommend this (and nothing else), and quirks I know about all sorts of travel cameras.

Hard to beat the m43 system if you’re looking for compact. One of the more modern bodies with a f1.2 prime lens will even do pretty good in low light.

My absolute top priority is size. If the camera isn’t small and easy to carry, I know that I just simply won’t use it enough. Ideally it should almost as easy to bring as my phone.

My own travel experience has led me to agree with this priority 100%.

I figured this out with a different approach, though. In 2022 (or so), when they were dirt cheap on Ebay, I bought a couple of the cameras in this roundup . Which means they’re old. But clone batteries are still cheap and readily available. The Canon in that list will run CHDK alternative firmware, which opens up some new features. And they really are small enough to be “as easy to bring as my phone,” but they have real optical zoom lenses, RAW files, and none of the computational HDR stuff.

The asking prices for these things have gone bonkers, but they could still be cheaper than the interchangable-lens systems you’re contemplating. I’ve had a ton of fun with mine, way more than I ever anticipated. Having a 400mm zoom in my pants pocket still feels like impossible spy movie stuff to me. One way to see sample pictures from a camera model is to search Flickr for that model, for example: Flickr pictures taken with the Canon SX230HS.

Best of luck with whatever you decide!

Since size is a must micro four thirds allows for smaller cameras but keep in mind it has some quirks, mainly mft(micro four thirds) is a smaller sensor therefore less quality also due to the sensor construction a 50mm lens would be equal to a 100mm on a full sensor

Dp buying guide is pretty good and it has link to buy it. https://www.dpreview.com/buying-guides

Second hand camera shop

My absolute top priority is size

Olympus PEN F (or other PEN models), with the 14/42 pancake lens (not the other cheap 14/42 lens) fits into your shirt pocket

2.Excellent video capabilities

Panasonic (I don’t know their model names) are even better for video than Olympus, and they are small, but not that small.

I just recently looked into the small camera market and ended up buying the new Fuji XT-30. Your budget is reasonable I think, although you may have to compromise on the video and/or low light capabilities.

The XT-30 is great and with the 27mm pancake would match most of your criteria and your budget. And it easily fits in most bigger pockets. You could also take a look at the new Fuji X-E5.

Went down this exact rabbit hole this weekend except I’m looking for used.

My list: (with different pros and cons)

Fuji x100 Vii

Leica something

Lumix gx9

Sony rx100 ii (no interchangeable lens)

Canon g7x III (no interchangeable lens)

These are the small ones… I would even say the Fuji is too big. Anything more than a pancake is also not small enough (which is sometimes limiting) hence I listed the last 2.

As Others Said, Look into Micro Four Thirds.

https://youtu.be/6YAhoVu1Jio Maybe this https://youtu.be/qWfAV7UnSdY Plus one of These tiny lenses.

I switched from Nikon to Panasonic and the menu and handling felt intuitive.

Fuji

Fuji X-E4 or 5.

Call me biased but a X-T30 iii.

Or a used X-T50, X-T30 ii.