Archive · 8 Sep 2026
Japan Q2 Growth Revised Higher on Business Investment
Japan’s economy grew faster than first reported in the second quarter.
The new estimate says it grew at an annual rate of 1.4%.
The first estimate had put growth at 1.1%.
Companies did not cut their investment as much as initially thought.
This helped make the overall economy look stronger.
Exports also helped growth, while domestic demand was slightly weak.
Household spending did not change from the first estimate.
The Bank of Japan is watching the data as it considers another interest-rate increase.
Higher energy costs, geopolitical tensions, and a weaker yen could still make life more expensive for households.
Japan’s economy grew at an annualized 1.4% rate in the April-June quarter, up from the initial 1.1% estimate.
Quarter-on-quarter GDP growth was revised to 0.4% from 0.3%, matching economists’ forecasts.
Business investment fell 0.9%, less than the initially reported 1.2% decline.
Net exports added 0.5 percentage point to growth, while domestic demand reduced it by 0.1 point.
The revised data may influence the Bank of Japan’s decision on whether to raise interest rates again.
- Who
- Japan’s economy, Japanese businesses, households, and the Bank of Japan are central to the report.
- What
- Japan revised its second-quarter annualized GDP growth estimate upward to 1.4%.
- When
- The quarter covered April through June; the revised figures were released on Tuesday ahead of the Bank of Japan’s next policy meeting.
- Where
- Japan.
- Why
- The revision reflected a smaller decline in business investment than initially estimated, while net exports also supported growth.
Case for another rate increase
Reasons for caution
Economic strength and inflation
Case for another rate increase
The stronger GDP revision, resilient corporate investment, and 2.4% real wage growth could support further monetary tightening.
Reasons for caution
Household spending remains subdued, domestic demand is still a drag, and higher borrowing costs could challenge an uneven recovery.
Impact of currency and costs
Case for another rate increase
A weaker yen can support exporters and adds to inflationary pressure, potentially strengthening the case for policy action.
Reasons for caution
A weaker yen also raises the cost of imported goods and energy, while geopolitical tensions and higher energy costs could hurt household purchasing power.
- Annualized GDP growth
- 1.4% in the April-June quarter, revised up from 1.1%
- Quarter-on-quarter GDP growth
- 0.4%, revised up from 0.3%
- Business investment
- Down 0.9%, compared with the initially estimated 1.2% decline
- Net exports
- Added 0.5 percentage point to GDP growth
- Domestic demand
- Reduced growth by 0.1 percentage point
- Real wage growth
- Inflation-adjusted wages rose 2.4% year on year in July
- Bank of Japan policy rate
- Raised to 1% in June