Japan's Economy Posts Modest Growth Amid Oil Price Pressures

The Japanese economy has reported modest growth in the second quarter, but the figure fell short of market expectations. According to preliminary data released by the Japanese cabinet office, gross domestic product (GDP) grew 0.3 percent between April and June.

This is lower than the expected 0.5 percent growth predicted by economists, who had also forecasted a stronger expansion in the first quarter. On an annualized basis, GDP expanded 1.1 percent, against market expectations of 2.0 percent.

The weak yen has contributed to higher oil prices and increased imports for Japan, which is exacerbating inflationary pressures. The Japanese government has implemented measures to support consumers, including a massive stimulus package and energy tax rebates.

NLI Research Institute economist Taro Saito attributed the modest growth to a decline in imports due to difficulties transiting the Strait of Hormuz.