Japan may barely maintain a rise in the second quarter, avoiding a technical recession under the impact of tariffs.

Jin10 data, August 14 - Despite facing the impact of U.S. tariffs, Japan's economy is expected to achieve moderate growth in the second quarter driven by domestic demand from capital expenditure, thus avoiding a technical recession. The median forecast from economists indicates that Japan's second quarter GDP may rise at an annualized rate of 0.4% quarter-on-quarter, reversing the contraction trend of the previous quarter. Among the 32 analysts surveyed, there is significant divergence in predictions: 4 expect the economy to continue shrinking while 5 believe the growth rate will reach 1% or higher. The Japanese Cabinet Office will release preliminary data on Friday. This data could prompt the Central Bank of Japan to maintain its policy path for another rate hike this year—as long as the authorities are confident that domestic demand remains resilient enough to withstand the ongoing pressure from U.S. trade policies on global business.