Japan grew only 1.1% in the quarter, half of what was expected

WHAT HAPPENED

Japan grew 1.1% between April and June, on an annualized basis: almost half of the 2% expected and less than the previous 1.9%. Household spending fell 1.2% and companies reduced their investment.

WHY IT MATTERS

More expensive oil and other raw materials, along with a weak yen, made gasoline and imported food more expensive. Families spent less and factories slowed equipment purchases; exports were the only support.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, the data shows how expensive energy can reduce consumption and investment even in a large economy. It can also pressure importing companies, while exporters receive support from a weak yen.