Japan’s economy has contracted more than expected in the latest quarter, as stagnant consumption and a decline in exports weigh heavily on economic growth. The data reveals a growing concern over domestic demand and external trade conditions, especially with the U.S. implementing stringent trade policies. This development underscores the ongoing challenges faced by Japan’s economy, which is already struggling with a shrinking population and an aging workforce.
Analysts are warning that the contraction could deepen if global trade tensions continue to escalate. The Japanese government has been trying to stimulate domestic demand through various fiscal measures, but the results have been mixed. Meanwhile, the impact of U.S. trade policies is becoming more pronounced, particularly in industries such as automotive and electronics, which are key exports for Japan.
Japan’s trade deficit has widened in recent months, partly due to a weaker yen and reduced export volumes. While some industries, such as technology, have seen increased demand from overseas markets, the overall economic picture remains grim. The Bank of Japan has been closely monitoring the situation, as it seeks to balance monetary policy with the need to support economic growth. However, with limited policy options remaining, the central bank is under pressure to find a solution to the economic slowdown.