Economy & Trade
Japan economy grows 0.3%, below Bloomberg survey forecast
Japan's economy grew 0.3% in the second quarter, official preliminary data showed Monday, falling short of the 0.5% growth expected by economists in a Bloomberg News survey.
Gross domestic product expanded between April and June on a seasonally adjusted basis, the Japanese Cabinet Office data showed. On an annualised basis, GDP grew 1.1%, below the 2.0% expected in the Bloomberg survey and down from a revised 1.9% in the previous three months.
The weaker-than-expected reading came after capital expenditure fell and private consumption was flat. AFP reported that higher oil prices have increased Japan's import bill, while the weak yen has added to consumer price pressures.
The yen has lost ground since a recent joint market intervention by the United States and Japan to support the currency. The operation initially lifted the yen to almost 155 per dollar after it had slipped to a four-decade low of almost 164, but it was trading around 159.11 on Monday.
Prime Minister Sanae Takaichi's government has expanded support for voters after earlier stimulus and energy tax rebates. In late July, the government said it would cut consumption tax on food products from eight percent to one percent starting next April.
NLI Research Institute economist Taro Saito told AFP the GDP figures were worse than expected and said both consumption and capital investment were weak. He said growth was not due to a robust economy but partly to a decline in imports, citing difficulty with oil imports because of problems transiting the Strait of Hormuz.
Update
Capital expenditure fell and private consumption was flat, both weaker than forecast.
Higher oil prices, the weak yen and import costs were described as pressures on consumers and the economy.
The yen was trading around 159.11 per dollar after an earlier joint US-Japan intervention had briefly lifted it to almost 155.
Japan's government has widened support for voters, including further aid and a planned cut in consumption tax on food products from eight percent to one percent next April.
NLI Research Institute economist Taro Saito said consumption and capital investment were weak and linked the growth partly to a decline in imports.
Source note: AFP news report published on 17 August 2026 at 00:50:31 UTC.
Update
Economists expected 0.5% quarterly growth, according to a Bloomberg News survey.
Annualised GDP growth was 1.1%, compared with market expectations of 2.0%.
AFP said the reading was likely to add to expectations that the Bank of Japan will raise interest rates as inflation accelerates.
The yen has lost ground since a recent joint US-Japan market intervention to support the currency.
Source note: AFP news report published on 17 August 2026 at 00:14:22 UTC.
Update
The 0.3% second-quarter GDP growth figure was a preliminary reading released by Japan's Cabinet Office.
Source note: AFP news report published on 17 August 2026 at 00:00:04 UTC.
Uncertainty notes
The GDP figures are preliminary.
The timing and likelihood of any Bank of Japan interest rate increase are not settled in the supplied material.
The full economic effect of the Iran war and Strait of Hormuz transit problems on Japan's imports is attributed to reporting and economist comment rather than established by the GDP data alone.
Source
AFP news report published on .