Japan's Second Quarter Economic Expansion Surpassed Expectations, Nikkei 225 Extended Weekly Gains to 4%

Akira Ito
15 Aug, 2025
Tokyo

Japan's stock market indexes advanced following better-than-expected economic growth in the second quarter.

The Nikkei 225 Stock Average increased 1.6%, and the broader Topix index increased 1.4%, as the rise in global exports supported economic expansion.

 

Japan's Q2 GDP Growth Surpassed Expectations

Japan's annual economic growth in the second quarter slowed to 1.2% from 1.8% in the third quarter, according to data released by the Cabinet Office on Friday. 

On a quarterly basis, Japan's GDP expanded 0.3% from an upwardly revised increase of 0.1% in the first quarter. 

Japan's economy expanded for the fifth quarter in a row amid steady consumer spending growth of 0.2%, and net international trade added 0.3 percentage points. 

Exports rebounded 2% compared to a decrease of 0.3%, and imports slowed to 0.6% from a 2.9% increase in the previous quarter, respectively. 

Exporters rushed to send shipments to the U.S. ahead of U.S. tariffs, contributing to the economic expansion. 

In addition, government spending was flat after falling 0.5% in the previous quarter.

Economists are cautious about the third quarter, as Japan faces a blanket tariff of 15% on shipments to the U.S., which is likely to dampen growth in the remainder of the fiscal year. 

The yen weakened to 147.15 against the U.S. dollar, and investors held out for the Bank of Japan to take a wait-and-see approach at the next policy meeting. 

The U.S. Federal Reserve may forego a possible rate cut after July's producer price inflation accelerated to 3.3% and the core rate jumped to 3.7%. 

The measure of wholesale prices rose at the fastest pace since June 2022, and the index increased 0.9% from the previous month.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average gained 1.6% to 43,332.37, and the broader Topix advanced 1.4% to 3,100.97. 

For the week, the Nikkei 225 Stock Average gained 4%, and the Topix added 2.8%. 

Lasertec Corp. soared 8.1% to ¥17,375.0, Disco Corp. advanced 1.8% to ¥42,380.0, and Tokyo Electron gained 1.2% to ¥21,515.0. 

Nippon Yusen KK increased 0.2% to ¥5,259.0, Mitsui O.S.K. Lines advanced 0.5% to ¥4,926.0, and Kawasaki Kisen Kaisha Ltd. added 1.6% to ¥2,254.0.