Japan’s Economy Grew 1.2% In Q2, Surpassing Expectations

Japan’s economy grew an annualized 1.2% in this year’s second quarter, surpassing the expectations of economists. Japan’s economy has proven to be resilient in the face of U.S. tariffs and geopolitical uncertainty, gaining 0.3% from the first quarter of this year. The Q2 growth was ahead of the 0.1% increase expected among economists who were polled by the Reuters news agency. Annualized growth was more than double the 0.4% forecast of economists. The strong Q2 results were attributed to resilience in exports, which added 0.3 percentage points to Japan’s growth compared to a 0.8% contraction in the first quarter of the year. Japan’s trade deficit narrowed from April to June compared to the first quarter, according to data from the country’s trade ministry. The benchmark Japanese stock index, the Nikkei 225, rose 0.59% on the economic growth news, while the yen currency gained 0.1% to trade at 147.6 against the U.S. dollar. The Nikkei 225 is currently at an all-time high. Japan reached a trade deal with the U.S. on July 23 of this year that will see a blanket 15% tariff imposed on all exports to America, including automobiles. Automotive exports to the U.S. are a pillar of Japan’s economy, making up 28% of all shipments to America in 2024, according to customs data. The Bank of Japan recently upgraded its forecast for the country’s economy to grow 0.6% this year, up from an earlier forecast of 0.5% growth. However, the central bank also cautioned that trade and other policies would lead to a slowdown in overseas economies, as well as a decline in domestic corporate profits. Still, Japan’s economy is doing much better than anticipated at the start of this year, when a majority of economist were forecasting a recession for the Asian nation.