Japan's Economic Growth Slows, Weighing on BoJ Rate Hike Plans

Japan's economic growth slowed to 0.3 percent on-month in April-June, down from 0.5 percent in the previous quarter, according to official data released Monday.

The reading is below market expectations of a 0.5 percent increase and highlights challenges for the Bank of Japan (BoJ) as it considers lifting interest rates.

Capital expenditure dropped, while private consumption was flat against forecasts of growth, contributing to the disappointing result.

The weaker-than-expected GDP growth rate comes at a time when Prime Minister Sanae Takaichi's government is implementing expansionary fiscal policies, including a massive stimulus package adopted in late 2025 and extensive energy tax rebates.