Japan's GDP Growth Misses Forecasts as Q2 Expansion Slows

Japan's economy expanded at an annualized pace of 1.1% in the second quarter of 2025, falling short of the 2% growth forecast by economists.

The reading marks a slowdown from the previous quarter’s revised growth, signaling that the world’s fourth-largest economy is facing headwinds from weak domestic consumption and external demand.

Private consumption rose just 0.1% from the previous quarter, falling short of the 0.3% expected, as households continued to grapple with the impact of persistent inflation and a weak yen.

The weaker-than-expected growth data complicates the Bank of Japan’s (BOJ) monetary policy path, with market participants now closely watching the BOJ's next policy meeting in September for signals on interest rates.