Japan Economy Expands Despite Private Consumption Slump

Japan's economy expanded by an annualized real 1.1 percent in the April-June quarter, marking its third consecutive quarterly growth. The increase was largely due to government spending, including subsidies for high school tuition and meal fees.

However, private consumption, which accounts for more than half of Japan's economy, declined by 0.02 percent during this period, its first drop in eight quarters. This indicates fragile domestic demand.

The government's expanded subsidy program made it unnecessary for consumers to spend on school and meal fees, while a tax hike on heated tobacco products from April also contributed to the decline in private consumption.