Japan’s economy continues to grow but at slower pace

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Subscribe to enjoy similar stories. The Japanese economy managed to continue growing for a second straight quarter thanks to a recovery in consumption, although the pace slowed amid the impact of natural disasters during the summer. Japan’s gross domestic product expanded 0.2% in the three months to September from the previous quarter, preliminary government data showed Friday.

That matched the forecast in a poll of economists by data provider Quick. The economy grew 0.5% in the April-June quarter, swinging back to growth after a first-quarter contraction. Although the pace of expansion in the latest quarter was mild, it is unlikely to shake the Bank of Japan’s view that the economy is improving toward its goal of steady growth and stable inflation.

At its last meeting in late October, the BOJ’s governor struck a less cautious tone about the outlook and reaffirmed that inflation and economic growth are on track. Many economists and investors expect the central bank to raise interest rates in the near term amid signs of improvements in the domestic economy, alongside concerns about inflation triggered by a weaker yen, which raises the cost of imports. The economy grew 0.9% on an annualized basis, which reflects what would happen if the third-quarter pace continued for a full year.

Private consumption increased 0.9% from the previous quarter, expanding for two consecutive quarters. While an increase in summer bonuses and a one-time income and residential tax cut buoyed consumer sentiment, typhoons and an earthquake warning made consumers hesitant to go out and spend. It remains unclear whether higher wages will smoothly translate into more spending by price-sensitive Japanese consumers, some economists say.