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Japan's economy beats estimates, grows 6% annualised in Q2

Japan's economy recorded a third consecutive quarter of growth in April-June, expanding at an annualised rate of 6.0%. This translates to a quarterly gain of 1.5%, surpassing the median estimate of 0.8% in a Reuters poll and following a revised 3.7% expansion in Q1. Brisk exports played a significant role, helping to counterbalance the slowing post-Covid recovery in the services sector. Despite this growth, looming global recession prospects cast uncertainty on future outlook. Notably, private consumption, which comprises over half of Japan’s economy, declined by 0.5% quarter-on-quarter, while exports grew by 3.2%. Net exports contributed 1.8 percentage points to Q2 growth, while domestic demand reduced it by 0.3 points. Last month, the Bank of Japan adjusted its policy to allow long-term interest rates to rise, signaling a potential shift away from substantial monetary stimulus.


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