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Japan's economy expands annualised 1.0% in April-June

Japan's GDP grew 1.0% annualized in Q2 2025, surpassing forecasts as automakers absorbed US tariff costs to maintain exports and production, officials reported.

  • Japan's economy expanded at an annualized real 1.0% in the second quarter of 2025, marking its fifth straight quarter of growth, according to preliminary Cabinet Office data released on Friday.
  • This growth occurred despite the imposition of 15% U.S. tariffs on Japanese imports last week, which increased costs for exporters and pressured industries such as automotive.
  • Capital investment rose 1.3% year-on-year and exports grew 2.0%, while consumer spending remained weak with only 0.2% growth amid rising prices and stagnant wages.
  • U.S. Treasury Secretary Scott Bessent said, "The Japanese have an inflation problem," highlighting calls for the Bank of Japan to raise interest rates amid economic uncertainty.
  • The sustained GDP growth supports Prime Minister Shigeru Ishiba but raises questions about impacts from tariffs and potential monetary tightening on future economic momentum.
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El Economista broke the news in on Thursday, August 14, 2025.
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