Japan's economy expanded at an annualised 1.1 percent in the April-June quarter, the Cabinet Office reported Sunday, missing the median market estimate of 2.0 percent and highlighting a persistent gap in growth momentum compared with the United States and Europe.
The seasonally adjusted 0.3 percent quarterly gain marked a third consecutive quarter of expansion but was driven largely by external demand, which added 0.5 percentage point to growth as exports benefited from strong U.S. appetite for hybrid vehicles and AI-related semiconductor equipment. Domestic demand proved weak: private consumption was essentially flat, missing forecasts for a 0.5 percent rise, while capital spending dropped 1.2 percent against expectations for a 0.4 percent increase. A de facto blockade of the Strait of Hormuz also depressed crude oil imports.
Looking ahead, a survey by the Japan Center for Economic Research found economists expect growth to slow sharply to just 0.05 percent annualised in the July-September period.