Japan's 'Resilient Growth': Economy Outpaces Projections Despite Tariff Tensions

Japan's economy has demonstrated unexpected resilience by expanding an annualized 1.0% in the April-June quarter, as revealed by government data released on Friday. This performance exceeded forecasted figures, thanks in large part to robust exports and steady capital expenditure.

Analysts, however, caution against overlooking possible future impacts of U.S. tariffs, which could dampen growth in the world's fourth-largest economy in ensuing months. Currently, private consumption and capital spending continue to be pivotal growth pillars, with an uptick surpassing prior estimates.

The government recently revised its inflation-adjusted growth forecast for the fiscal year downward from 1.2% to 0.7%, anticipating that U.S. tariffs might curb capital expenditure as ongoing inflation pressures consumer spending. Despite current stability, future export dynamics remain a concern as costs could soon be passed to U.S. buyers.

(With inputs from agencies.)