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Investing.com-- Japan’s economy expanded more than expected in the second quarter, as exports and capital spending remained resilient despite U.S. tariff pressures during the period.
GDP grew 1% year-on-year in the April–June quarter, up from 0.6% seen in the first quarter, and was also well above the 0.4% anticipated, according to Cabinet Office figures released on Friday.
Quarter-on-quarter GDP rose by 0.3%, surpassing forecasts of 0.1%.
External demand as a component of GDP rebounded during the period, rising 0.3% after a 0.8% q-o-q decline in the previous quarter.
Japanese automakers, the nation’s top exporters, have largely offset U.S. tariff costs by cutting prices to keep domestic plants operating, helping exports avoid a major hit.
Private consumption as a component of GDP grew steadily at 0.2%, while Capital expenditure jumped 1.3% q-o-q, much sharper than estimates of a 0.5% rise.
The stronger-than-expected outcome may bolster the case for the Bank of Japan to consider further tightening, though policymakers remain cautious amid uncertainty over U.S. tariffs and global demand. The government last month cut its inflation-adjusted growth forecast for the fiscal year to 0.7% from 1.2%.