16.08.202623:50:00UTC+00Japan’s Growth Momentum Cools as Annualized Q2 GDP Slows to 1.1%

Japan’s economic expansion lost steam in the second quarter of 2026, with annualized GDP growth easing to 1.1%, down from 1.8% in the first quarter. The latest figures, updated on 16 August 2026, underscore a moderation in the country’s growth momentum on a quarter-over-quarter comparison basis.

The actual reading for the second quarter reflects how output expanded compared with the first quarter of 2026, while the earlier 1.8% figure captured the change from the fourth quarter of the previous year to the first quarter of 2026. The step down in the annualized rate suggests that, although Japan’s economy continued to grow, it did so at a slower pace than at the start of the year.

This deceleration could be closely watched by policymakers and market participants, as it may influence expectations for fiscal and monetary support going into the second half of 2026. Investors will be looking to upcoming data releases to gauge whether the second-quarter softness is a temporary pause or the start of a more sustained cooling in Japan’s recovery trajectory.