Japan's economy grows 1.1% in Q2

Japan's economy grew at an annualized rate of 1.1% in the April-June period for a third straight quarterly expansion, helped by government spending, though weak private consumption clouds the outlook.

Gross domestic product adjusted for inflation increased 0.3% from the January-March period in the first full quarter to include the impact of the Iran war, which raised energy prices, official figures from the Cabinet Office of the country showed on Monday.

Private consumption edged down 0.02% for the first fall in eight quarters, highlighting fragile domestic demand.

A 1.6% gain in government consumption pushed the GDP figure up following an expanded subsidy program, including aid for high school tuition and school meal fees that began in April.

A Cabinet Office official said private consumption, which accounts for more than half of the economy, fell as the government program made it unnecessary for consumers to spend on school and meal fees, while a tax hike on heated tobacco products from April sapped demand.

Demand for cars following the abolition of the environmental performance tax at the end of March and for air conditioners ahead of expected price hikes due to tighter energy-saving requirements turned out to be weaker than expected.

Business investment declined 1.2% from the January-March quarter, partly due to reduced orders for software.

Exports rose 0.5% and imports fell 1.5% as the effective closure of the Strait of Hormuz due to the Middle East conflict hit crude oil shipments.