Japan Economy Misses Forecasts Amid Weak Spending and Investment

Japan's economy grew at a slower-than-expected pace in April-June due to weak household spending and business investment. The country's gross domestic product (GDP) rose 1.1% in annualized terms, missing the median market estimate of 2.0%. This growth was mainly attributed to one-off factors, despite ongoing global uncertainties and a weak yen.

Kazutaka Maeda, senior economist at Meiji Yasuda Research Institute, stated that 'growth was positive, but the details were somewhat weaker than expected.' He added that given the disappointing results are likely to have been driven by temporary factors, it doesn't suggest weakness ahead or affect the timing of the Bank of Japan's next interest rate hike.

Private consumption dropped 0.02% in the second quarter versus market expectations for a 0.5% increase, marking the first decline in eight quarters. Analysts said the weakness stemmed from uncertainties caused by supply chain disruptions linked to the Middle East war and the overseas sale of a large pharmaceutical patent asset.