Slowing Economy Complicates BoJ's Rate Hike Plans

Japan's economic growth unexpectedly slowed in the second quarter of this year. According to data from the Cabinet Office, real gross domestic product grew only 1.1% on an annualized basis between April and June.

This is a slower pace than the revised 1.9% growth seen in the previous quarter and below economists' forecasts for 2% expansion. Despite this, it marks the third consecutive period of growth.

The slowing economy has implications for the Bank of Japan's (BoJ) policy decisions. The central bank is considering a rate hike, but this data may complicate their communications on the timing of such a move.

Capital investment fell 1.2% on a non-annualized basis in the second quarter, missing estimates and showing a steeper decline than previously seen.