This photo taken on April 21, 2025 shows a customer walking past a display of instant noodles at a branch of Japanese discount retailer Don Quijote, also known overseas as Don Don Donki, in the Shibuya district of central Tokyo. (Photo by Richard A. Brooks \/ AFP) (Photo by RICHARD A. BROOKS\/AFP via Getty Images) <\/p>\n
Richard A. Brooks | Afp | Getty Images<\/p>\n
Japan’s economy expanded 1.1% in the second quarter on an annualized basis, missing expectations for 2% growth as softer domestic demand offset strong exports. <\/p>\n
The figure was compared to the 2.1% in the previous quarter. <\/p>\n
On a year-on-year basis, the country’s economy expanded 0.7%, up from 0.5% in the first quarter. <\/p>\n
This is the first full quarter to include the impact of the Iran war, which has brought energy prices higher for business and households.<\/p>\n
Following the data release, the Nikkei 225 rose 0.43%, while the yield on the benchmark 10-year Japanese Government Bonds was at 2.88%. The\u00a0yen\u00a0strengthened slightly against the dollar, trading at 159.1.<\/p>\n
Exports were the main driver of growth, with shipments from the country beating expectations for all<\/a> three<\/a> months<\/a> of the quarter. However, this was helped by the weak yen as opposed to simply a higher volume of shipments. <\/p>\n Earlier this month, the Bank of Japan released its economic activity outlook, and raised its GDP growth outlook marginally to 0.6% from 0.5% for its 2026 fiscal year ending March 2027. <\/p>\n “Japan’s economy is expected to continue growing moderately, albeit at a decelerated rate,” the central bank said<\/a>, pointing at high crude oil prices from the conflict in the Middle East. <\/p>\n However, this is likely to be partially offset by measures from the government to curb high oil prices for households, as well as an increase in global AI-related demand. Many Japanese companies are involved in the semiconductor supply chain.<\/p>\n \u2014 This is breaking news, please check back for updates.<\/p>\n