Japan's GDP (Jan–Mar 2026 1st preliminary estimate)

Research evidence excerpt

Japan's GDP (Jan–Mar 2026 1st preliminary estimate)

19 May 2026

Mizuho Securities Equity Research Economics / Domestic and Overseas Economy

Macroeconomic Outlook

External demand contributes on higher exports, but domestic demand solid overall

Chief Economist: Summary

Shunsuke Kobayashi Jan–Mar 2026 real GDP was up 0.5% QoQ (+2.1% annualized), marking

+81 3 6202 8222 the second straight quarter of positive growth and exceeding the Bloomberg

shunsuke.kobayashi@mizuho-sc.com consensus (+0.4% QoQ, +1.7% annualized).

Economist: Overseas demand made a relatively large contribution to growth, but domestic

Soichiro Hirose demand was also generally solid. External demand contributed +0.3ppt QoQ,

+81 3 6202 8293 driven by exports of goods such as autos and semiconductor components.soichiro.hirose@mizuho-sc.com However, we note that export growth was partially boosted by the Strait of

Hormuz closure, which limited import growth. Domestic demand contributed

+0.2ppt QoQ. Real employee compensation rose by 0.2%, remaining on an

uptrend thanks to moderate growth across a wide range of demand items.

Japan’s terms-of-trade loss came to an annualized ¥6.6t, expanding from the

¥5.7t deficit in the previous quarter. As a result, gross domestic income (GDI),

an indicator of people’s living standards, was slightly more subdued than real

GDP growth but rose for the second straight quarter, up 0.4% QoQ (+1.4%

annualized). The GDP deflator was up 0.3% QoQ in Jan–Mar 2026, marking

the eighth straight quarter of growth. As a result, the nominal GDP growth rate

rose for the eighth consecutive quarter, up 0.8% QoQ (+3.4% annualized).

The biggest risk factor for the Japanese economy going forward is the situation

in the Middle East.

Real scheduled cash earnings determine trends in real household