Japan Q2 GDP 1.1% annualized, misses forecasts

Japan's GDP expanded at an annualised 1.1% in the April-June 2026 quarter, with a 0.3% quarterly increase, while private consumption remained flat and exports drove growth. The export strength was led by autos and semiconductors, aided by a weak yen that boosts overseas earnings for exporters. The Iran war has pushed energy costs higher, weighing on domestic demand despite robust external demand. Analysts had anticipated stronger growth, and the Bank of Japan has nudged its fiscal-year outlook up to about 0.6%. The rebound underscores AI-related demand and semiconductor supply-chain activity as key supports for Japan's economy. Government measures to curb high oil prices for households are expected to help offset some cost pressures on consumers.