On June 8, the Japanese government released revised data showing the economy grew at a seasonally adjusted annualized rate of 1.8% in the first quarter of 2026 (January-March), lower than the preliminary figure of 2.1%.
The downward revision was primarily due to capital expenditure rising more slowly than originally estimated. Despite the adjustment, Japan's economy recorded its third consecutive quarter of growth, supported by a recovery in private consumption and exports.
The Ministry of Internal Affairs and Communications reported that personal consumption, which accounts for more than half of GDP, rose 0.6% from the previous quarter, slightly below the preliminary estimate of 0.7%. Corporate capital investment, expected to drive growth, increased only 0.2% quarter-on-quarter, a sharp decline from the initial 0.6%.
Meanwhile, net exports (exports minus imports) made a positive contribution to growth, driven by demand from Asia and the United States. However, labor shortages and rising raw material prices remain challenges for Japanese businesses in the second half of the year.
Analysts said the downward revision reflects a slower-than-expected recovery in corporate investment, despite various government support measures for investment and digital transformation. This official data will serve as a basis for the Bank of Japan (BOJ) to reassess its monetary policy at upcoming meetings.
