Japan's Q2 GDP Grows Much Faster than Expected, Helped by Exports

JAPAN - TOKYO. Japan's economy expanded for a third straight quarter in April-June, as brisk exports helped offset the drag from a slowing post-COVID recovery in the services sector, although global recession prospects cloud the outlook.

The 6.0% annualised growth in Japan's gross domestic product (GDP) figure translated into a quarterly gain of 1.5%, much bigger than median estimates of 0.8% in a Reuters poll.

It followed a revised 3.7% expansion in the first quarter.

The solid GDP data provides relief to policymakers who are seeking to balance economic growth with sustainable inflation and steady wage increases.

By key sub-sectors, private consumption, which makes up more than half of the economy, fell 0.5% quarter-on-quarter in the April-June period.

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Exports expanded 3.2% in the second quarter, while capital expenditure was flat.

External demand, or net exports, added 1.8 percentage points to second quarter growth, while domestic demand shaved off 0.3% points.

The Bank of Japan took steps last month to allow long-term interest rates to rise more, a move seen by analysts as the beginning of a gradual shift away from massive monetary stimulus.