GDP rises 0.3 % within the second quarter as consumption and capital spending sag.
Revealed On 17 Aug 2026
Japan’s economic system slowed within the second quarter of the yr amid moribund consumption and capital spending, in response to official figures.
Gross home product (GDP) grew 0.3 % within the April-June interval from the primary quarter, information launched by Japan’s Cupboard Workplace on Monday confirmed.
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It was the third consecutive enlargement however was down from 0.5 % development within the earlier quarter and missed the 0.5 % development analysts had forecast.
On an annualised foundation, the world’s fourth-largest economic system expanded 1.1 %.
A survey of 37 economists carried out by the Japan Middle for Financial Analysis, a suppose tank, had forecast an annualised enlargement of 1.67 %.
Personal consumption was flat in actual phrases whereas capital expenditures fell 1.2 %, or 4.6 % on an annualised foundation, offsetting robust exports, in response to the information.
Damaged down by part, internet exports contributed 0.5 proportion factors to GDP development whereas home demand accounted for damaging 0.2 %.
Norihiro Yamaguchi, lead economist for Japan at Oxford Economics, mentioned he anticipated development to be sluggish within the second half of 2026 as firms cross rising power prices on to customers.
“Though AI-related items exports will proceed to remain sturdy within the close to time period, sluggish non-AI-related world financial actions will restrict total export positive factors,” Yamaguchi mentioned in a word to purchasers.
Japan imports nearly all of its crude oil wants, leaving it uncovered to elevated power prices stemming from the fallout of the United States-Israel battle on Iran.
Value pressures on Japan’s customers have been exacerbated by the weak spot of the Japanese yen, which final month hit a 40-year low towards the US greenback.
The weaker-than-expected development figures may complicate the Financial institution of Japan’s (BOJ) upcoming resolution on rates of interest, because it pushes forward with normalising financial coverage after many years of ultra-low and damaging borrowing prices.
The BOJ, which is able to maintain its subsequent coverage assembly on September 17 and 18, in June raised its benchmark rate of interest to 1 %, its highest in additional than three many years.
An rate of interest hike in September may assist alleviate the persistent weak spot of the yen by lowering the massive hole in borrowing prices between Japan and different main economies, particularly the US.
Japan’s central financial institution started to maneuver away from its ultra-loose financial coverage in 2024 when it introduced its first fee hike for the reason that 2008 world monetary disaster.
Japan’s inventory market rose on Monday amid a broader rally in Asia, with the benchmark Nikkei 225 ending up greater than 0.7 %.
South Korea’s KOSPI gained 2.4 %, whereas the Cling Seng Index in Hong Kong and the SSE Composite Index in Shanghai each climbed about 1.4 %.
In Taiwan, the TAIEX closed up 0.1 %.
