Japan's economic growth slows, demand weakens, but yields notch higher

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Japan's economy grew just 1.1% in Q2 2026, missing the 2.0% market forecast, as weak consumer spending and business investment weighed on growth.

Yet, inflationary pressures and a weaker yen are fueling expectations that the Bank of Japan could raise rates as soon as September.

Japan's economic growth slows, demand weakens, but yields notch higher

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