Japan's economy grew at an annualized rate of 1.1% in the second quarter, falling short of market expectations of 2%. This follows a 2.1% growth in the first quarter. The lower-than-expected growth was primarily attributed to weak domestic demand, despite strong export performance, partly due to a weaker yen. The report noted that the war in Iran led to increased energy prices, impacting businesses and households. The Bank of Japan (BOJ) had slightly raised its GDP growth forecast for fiscal year 2026 (ending March 2027) to 0.6% earlier this month.