What Happened: Japan's gross domestic product (GDP) grew at an annualized rate of 2.1 percent in the first quarter of 2019, surpassing forecasts of a 0.2 percent contraction, The Japan Times reported May 20. However, Japan's imports and exports declined over the same period alongside household spending and capital investment.
Why It Matters: Japan's release of better than expected GDP growth figures will provide further justification for arguments within the government to proceed with raising the country's consumption tax in October, although additional economic data over the next months will likely determine whether Tokyo will move forward with the tax hike.
Background: The ongoing trade war between China and the United States, weak global demand, and U.S. threats to impose auto tariffs have been dragging on Japan's economy. A Japanese delegation led by the country's ambassador for international economic affairs will arrive in Washington on May 21 for talks on U.S.-Japan trade negotiations and U.S. President Donald Trump will travel to Japan from May 25-28 to meet Japanese Prime Minister Shinzo Abe.
- Japan, U.S.: Industrial Giants Take the Slow Road to a Trade Deal (April 12, 2019)
- Japan Has Carefully Paved the Way for Trade Talks With the U.S. (Nov. 29, 2018)
- Japan's Auto Sector Is Poised to Weather a U.S. Tariff Storm (Sept. 3, 2018)