MNI BRIEF: Japan Q2 GDP Rises 0.3% Q/Q; Annualised +1.0%

Japan’s economy grew 0.3% q/q, or an annualised 1.0%, over Q2, supported by strong capital investment, solid private consumption and a positive contribution from net exports, preliminary Cabinet Office data showed Friday. 

The result marked the fifth straight quarter of growth and exceeded the MNI median forecast of +0.1% q/q, or +0.2% annualised, suggesting limited impact from U.S. trade policy in Q2.

The data were broadly in line with Bank of Japan expectations for a moderate recovery, though private consumption lacked strong momentum. 

BOJ officials are watching closely how exports and production evolve from July as U.S. tariff effects emerge.

Private consumption, which makes up about 60% of GDP, rose 0.2% q/q for a second straight quarter, while business investment climbed 1.3% for its fifth consecutive gain. Net exports added 0.3 percentage point to growth after subtracting 0.8 point in Q1, with exports up 2.0% q/q and imports up 0.6%.

Private inventories subtracted 0.3 points from GDP after a 0.6-point boost in Q1. Public investment fell 0.5%, making no meaningful contribution to growth.

Q1 GDP was revised up to +0.1% q/q (+0.6% annualised) from -0.0% q/q (-0.2% annualised).