Japan's economy expands more than expected in second quarter despite U.S. tariff headwinds

Japan's system expanded 0.3% successful the 2nd 4th of 2025, compared to the archetypal 3 months of the year, arsenic the state grappled with the volatile tariff argumentation retired of the United States.

This was compared to the revised 0.1% maturation seen successful the archetypal quarter, and was higher than the 0.1% summation expected by economists polled by Reuters.

On a year-over-year basis, Japan's GDP expanded 1.2% successful the 2nd quarter, falling abbreviated of the archetypal quarter's 1.8% growth.

The GDP speechmaking comes arsenic Japan struggled to header with an uncertain commercialized situation successful the 2nd quarter, with the state lone reaching a commercialized woody with the U.S. connected July 23.

The woody sees Japan look a 15% broad tariff connected each exports to the U.S., including automobiles.

Throughout the 2nd quarter, Japan was spared the 24% tariff that was announced connected "Liberation Day," but had to look 25% duties connected its cardinal automobile sector.

Auto exports to the U.S. are a cornerstone of Japan's economy, making up 28.3% of each shipments successful 2024, according to customs data.

Trade information from April to June revealed that exports to the U.S. had plunged twelvemonth implicit twelvemonth for each three months, with June seeing an 11.4% drop successful shipments compared to the aforesaid play a twelvemonth ago.

Marcel Thieliant, caput of Asia-Pacific astatine Capital Economics, noted that the 11.4% diminution successful exports to the U.S. was the largest since the commencement of the Covid-19 pandemic successful 2020.

After its July 31 meeting, the Bank of Japan upgraded its forecast for the country's economy to turn 0.6% successful its 2025 fiscal year, moving from April 2025 to March 2026.

However, the cardinal slope besides cautioned that commercialized and different policies globally would pb to a slowdown successful overseas economies, arsenic good arsenic a diminution successful home firm profits.

— This is breaking news, delight cheque backmost for updates.