Japan’s economy expanded at a stronger rate in the fiscal first quarter than previously estimated, despite worries about U.S. tariffs and domestic political uncertainty, according to government data released Monday.
The Cabinet Office said Japan’s real gross domestic product grew at a seasonally adjusted 2.2% annualized rate in the April–June quarter from the previous quarter.
That was better than the preliminary estimate for 1% growth, released last month, as solid consumer spending and inventories lifted growth more than previously thought.
Quarter over quarter, Japan’s GDP grew 0.5%, up from the initial estimate of a 0.3% rise, which was also what analysts projected, according to RaboResearch.
That marked the fifth straight quarter of growth. The annualized figure shows what the growth, or contraction, would have been if the quarterly rate continued for a year.
U.S. President Donald Trump’s move to raise tariffs on Japanese imports is a major worry for the export-dependent economy, particularly auto exports, which now face a 15% tariff, up from 2.5%.
Another concern is political uncertainty after Prime Minister Shigeru Ishiba announced Sunday he is stepping down as head of the ruling party. A party election will follow in the coming weeks.
Private consumption rose 0.4%, according to the latest government data, better than the initial estimate of 0.2% growth. That lifted domestic demand into positive territory at 0.2% growth, compared with the earlier data showing a 0.1% contraction.
Japan’s benchmark Nikkei rose in morning trading, despite Ishiba’s announcement, as the move was somewhat expected and the market appeared to welcome it as a step forward.
Still, analysts say uncertainty remains because it is unclear what parties might join a coalition with the ruling party.