Japan's economy expanded 0.3 percent in the second quarter of 2025, below analyst expectations of 0.5 percent growth, as private consumption was flat and capital spending declined, according to data released by Japan's Cabinet Office on Monday.
Japan's GDP grows 0.3% in Q2, missing analyst forecasts as consumption stalls
Japan's economy expanded 0.3 percent in the second quarter of 2025, below analyst expectations of 0.5 percent growth, as private consumption was flat and capital spending declined, according to data released by Japan's Cabinet Office on Monday.
The April-June result marked the third consecutive quarter of expansion but was down from 0.5 percent growth recorded in the previous quarter. On an annualised basis, GDP grew 1.1 percent, falling short of the 1.67 percent annualised expansion forecast by a survey of 37 economists conducted by the Japan Center for Economic Research.
Capital expenditures fell 1.2 percent quarter-on-quarter, or 4.6 percent on an annualised basis. Private consumption was flat in real terms. Net exports contributed 0.5 percentage points to GDP growth while domestic demand subtracted 0.2 percentage points, according to the Cabinet Office data.
Japan imports almost all of its crude oil needs, leaving it exposed to elevated energy costs that the source links to the fallout of the United States-Israel war on Iran. The weakness of the Japanese yen, which last month hit a 40-year low against the US dollar, has added further cost pressure on consumers, according to the source.
The Bank of Japan raised its benchmark interest rate to 1 percent in June, its highest level in more than three decades. The central bank began moving away from ultra-loose monetary policy in 2024, when it announced its first rate hike since the 2008 global financial crisis. A decision on rates is expected in September.
Japan's Nikkei 225 stock index rose 0.3 percent as of 05:15 GMT on Monday. South Korea's KOSPI gained 2.4 percent and Hong Kong's Hang Seng Index rose 1.6 percent on the same day.
- The source does not state the Bank of Japan's current assessment of or response to the weaker-than-expected growth figures.
- The source does not identify which analysts or institutions produced the 0.5 percent quarterly growth forecast that was missed.
- The source does not state the specific date in the previous month when the yen hit its 40-year low against the US dollar.
- The source does not state whether the Q2 GDP figures are preliminary or final.
- The source does not clarify whether the reference to 'the second half of 2026' in Yamaguchi's forecast is accurate or a typographical error given that the story appears to concern 2025 data.
Read the original at Al Jazeera English