Japan’s economy has expanded much faster than forecast, as a surge in exports more than offset weaker-than-expected results for both business investment and private consumption.
Gross domestic product grew at an annualised pace of six in the second quarter, marking the strongest growth since the last quarter of 2020, Cabinet Office data showed.
The figure exceeded economists’ forecast of 2.9 per cent growth. Net exports contributed 1.8 percentage points to the expansion versus consensus estimates of 0.9 points.
Tuesday’s data adds to signs that the world’s third-largest economy continues to recover from the pandemic. The size of the economy grew to 560.7 trillion yen ($3.85 trillion), the biggest on record, surpassing its pre-pandemic peak.
The result was consistent with views at the International Monetary Fund, which recently bumped up its 2023 growth outlook for Japan to 1.4 per cent.
Still, the strong result came with caveats, as much of the growth came from external demand.
“I can’t say all is good when I look at the content. Only net exports beat estimates a lot while consumption weakened and it remains below the level before the pandemic,” said Taro Saito, head of economic research at NLI Research Institute. “I can say that this won’t be a factor to move the BOJ towards policy normalisation.”
Bloomberg Economics' Taro Kimura said. “the only problem – it was all export driven and masked rocky conditions in domestic demand. The drop in consumption, despite a tailwind from this year’s reopening, reflects the impact of wages lagging far behind cost-push inflation.”
Trade data showed that exports remained resilient over the past quarter, led by auto shipments to the US and Europe. It’s unclear if that boost will be sustained, as economists see headwinds on the horizon in the US, China and Europe.
Rising numbers of inbound travellers, whose contribution is also factored into the net exports component of GDP, provided a big economic boost after authorities lifted border controls at the end of April. The number of foreign visitors has recovered to more than 70 per cent of pre-pandemic levels as of June, according to the Japan National Tourism Organisation. Data for July is due Wednesday.
Tourism spending is expected to provide a bigger boost from August after China last week lifted a ban on group travel. Chinese tourists accounted for more than a third of the more than 1 trillion yen in such outlays in 2019.
“Compared with the January-March period, the improvement seen in consumption driven by increased activity has weakened,” said Harumi Taguchi, principal economist at S&P Global Market Intelligence. “Rising prices are increasingly causing consumers to hold off on buying items.”
Capital spending by businesses was flat, versus forecasts of a 0.4 per cent increase, while private consumption, which accounts for more than 50 per cent of total GDP, unexpectedly declined by 0.5 per cent.
Those signs of domestic weakness may quell market speculation that the Bank of Japan will seize the strong headline number as justification for debating whether to mull a move away from its massive stimulus, as Governor Kazuo Ueda has cited uncertainties in overseas markets in recent comments.
In its latest Outlook report, the BOJ noted that external demand may flag in the months ahead, saying, “Exports and production are projected to be affected by the slowdown in the pace of recovery in overseas economies resulting mainly from the impact of global inflationary pressure and policy interest rate hikes by central banks.”
Still, the result may be welcome news to Prime Minister Fumio Kishida as he looks for positive developments to reverse a recent dip in his approval ratings in nationwide polls. His popularity suffered after the roll-out of new ID card for citizens was beset by problems.
The weakening of the yen is weighing on domestic demand as it drives up costs for imported goods. “Import prices are also rising due to the weak yen and other factors, putting downwards pressure on imports,” said Shumpei Goto, researcher at The Japan Research Institute.
That impact may linger as the yen slid on Tuesday to its weakest versus the dollar since November.
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
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Why are asylum seekers being housed in hotels?
The number of asylum applications in the UK has reached a new record high, driven by those illegally entering the country in small boats crossing the English Channel.
A total of 111,084 people applied for asylum in the UK in the year to June 2025, the highest number for any 12-month period since current records began in 2001.
Asylum seekers and their families can be housed in temporary accommodation while their claim is assessed.
The Home Office provides the accommodation, meaning asylum seekers cannot choose where they live.
When there is not enough housing, the Home Office can move people to hotels or large sites like former military bases.
Squad for first two ODIs
Kohli (c), Rohit, Dhawan, Rayudu, Pandey, Dhoni (wk), Pant, Jadeja, Chahal, Kuldeep, Khaleel, Shami, Thakur, Rahul.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
UAE currency: the story behind the money in your pockets
More from Neighbourhood Watch:
Five films to watch
Castle in the Sky (1986)
Grave of the Fireflies (1988)
Only Yesterday (1991)
Pom Poki (1994)
The Tale of Princess Kaguya (2013)
Killing of Qassem Suleimani
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
Profile
Co-founders of the company: Vilhelm Hedberg and Ravi Bhusari
Launch year: In 2016 ekar launched and signed an agreement with Etihad Airways in Abu Dhabi. In January 2017 ekar launched in Dubai in a partnership with the RTA.
Number of employees: Over 50
Financing stage: Series B currently being finalised
Investors: Series A - Audacia Capital
Sector of operation: Transport
KILLING OF QASSEM SULEIMANI
The biog
Favourite pet: cats. She has two: Eva and Bito
Favourite city: Cape Town, South Africa
Hobby: Running. "I like to think I’m artsy but I’m not".
Favourite move: Romantic comedies, specifically Return to me. "I cry every time".
Favourite spot in Abu Dhabi: Saadiyat beach
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
Killing of Qassem Suleimani
ACL Elite (West) - fixtures
Monday, Sept 30
Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)
Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)
Killing of Qassem Suleimani
MATCH INFO
Uefa Champions League semi-final, second leg result:
Ajax 2-3 Tottenham
Tottenham advance on away goals rule after tie ends 3-3 on aggregate
Final: June 1, Madrid
'Skin'
Dir: Guy Nattiv
Starring: Jamie Bell, Danielle McDonald, Bill Camp, Vera Farmiga
Rating: 3.5/5 stars
