Market Updates

Japan's Second Quarter Economic Growth Highlighted Persistent Domestic Demand Weakness

Akira Ito
17 Aug, 2026
Tokyo

    Japan's indexes advanced on Monday and extended previous week's gains as investors reviewed the latest update on economic growth. 

    The Nikkei 225 Stock Average increased 0.4%, the broader TOPIX fell 0.4%, and the yen edged up to 159.05 against the U.S. dollar. 

    Japan's economy grew at an annual pace of 1.1% in the second quarter, accelerating from 0.5% in the previous quarter, according to the Cabinet Office. 

    The resilience in exports and factory activity expansion offset the weakness in domestic demand, as global demand for electronic components and electrical equipment supported foreign shipments. 

    On a quarterly basis, economic growth slowed to 0.3% in the second quarter from 0.5% in the previous quarter, as domestic demand subtracted 0.2 percentage point growth. 

    The ongoing conflict in the Middle East is expected to further strain household finances and corporate budgets, which will likely negatively impact economic growth in the third quarter. 

     

    Japan Indexes and Stocks 

    The Nikkei 225 Stock Average increased 0.4% to 68,954.52, and the broader TOPIX decreased 0.4% to 4,175.34. 

    Semiconductor- and AI-linked stocks advanced on Monday in Tokyo's trading as investors added exposure to high-flying tech stocks. 

    Kioxia Holdings Corp. soared 14% to ¥61,170.0, Tokyo Electron added 1.2% to ¥59,850.0, Advantest Corp. gained 2.2% to ¥37,690.0, and Fujikura Ltd. soared 6.2% to ¥6,022.0. 

    SoftBank Group advanced 1.9% to ¥5,851.0, and Nvidia is reported to be planning to invest up to $3 billion in the company's subsidiary SB Energy, developing a major data center facility in Ohio for OpenAI. 

     

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