The GDP beat was mainly attributed to resilience in exports, which added 0.3 percentage points to GDP growth, compared to the 0.8% contraction in the first quarter of the year. Japan’s trade deficit narrowed from April to June compared to the first quarter, according to data<\/a> from the country’s trade ministry.<\/p>\n On a year-over-year basis, Japan’s GDP expanded 1.2% in the second quarter, falling short of the first quarter’s 1.8% growth.<\/p>\n Annualized growth came in at 1%, more than double the 0.4% forecast.<\/p>\n The benchmark Nikkei 225<\/a> rose 0.59% on the news, while the yen<\/a> edged up 0.1% to trade at 147.6 against the dollar.<\/p>\n Stock Chart IconStock chart icon This comes as Japan struggled to cope with an uncertain trade environment in the second quarter, with the country only reaching a trade deal with the U.S. on July 23<\/a>.<\/p>\n The deal sees Japan face a 15% blanket tariff on all exports to the U.S., including automobiles.<\/p>\n Throughout the second quarter, Japan was spared the 24% tariff that was announced on “Liberation Day,” but had to face 25% duties on its key automobile sector.<\/p>\n Auto exports to the U.S. are a cornerstone of Japan’s economy, making up 28.3% of all shipments in 2024,\u00a0according to customs data<\/a>.<\/p>\n Marcel Theliant, Head of Asia Pacific at Capital Economics, said in a Friday note that Japan was “shrugging off U.S. tariffs.”<\/p>\n However, Theliant pointed out that while the GDP rebound was “stronger than anticipated,” he expected a renewed slowdown over the coming quarters as investment spending was set to soften and exports to decline slightly.<\/p>\n![\"hide](\"https:\/\/static-redesign.cnbcfm.com\/dist\/a54b41835a8b60db28c2.svg\")
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