Japan economy rebounds in Q2 with better-than-expected growth
Fumio Kishida's decision to step down.
The rebound came after the economy shrank 0.6 percent — adjusted upwards from an earlier figure of minus 0.7 percent — in the first quarter to March.
The rise, due to increases in production along with capital and public investment, beat market expectations of a 0.6 percent expansion for the world's number four economy.
«Consumer sentiment should have improved because real wages have turned positive as promised wage increases start to get paid to workers,» Hiroyuki Ueno, chief strategist at SuMi Trust, said before the data's release.
«In addition, the recovery in shipments by some automakers, some of which were suspended temporarily in May, will also have been a positive boost for consumer spending.»
Auto production gradually resumed in the quarter after months of suspensions due to scandals that affected firms across the industry, a major economic driver for Japan.
Toyota subsidiary Daihatsu in particular halted production for months from late 2023 after admitting it had engaged in safety test irregularities for years.
Thursday's economic news comes a day after Kishida said he would step down next month after dropping out of the race to retain the leadership of his party.
Kishida's poll ratings had tumbled since taking office almost three years ago because of price rises that have eaten into Japanese incomes and a slew of scandals.
The yen also fell sharply and the economy struggled to gain traction despite major stimulus efforts including tax cuts by Kishida's
