Japan Economics: GDP Forecast Table Update (After Revised Jan-Mar 2026 GDP)

Research evidence excerpt

Japan Economics: GDP Forecast Table Update (After Revised Jan-Mar 2026 GDP)

Update

June 8, 2026 12:15 PM GMT

Morgan Stanley MUFG Securities Co., Ltd.MJapan Economics | Japan Takeshi Yamaguchi

Chief Japan Economist

GDP Forecast Table Update Takeshi.Yamaguchi@morganstanleymufg.comMasayuki Inui +81 3 6836-5404

Economist

Masayuki.Inui@morganstanleymufg.com +81 3 6836-5407

(After Revised Jan-Mar 2026

GDP)

Stronger Apr-Jun start than expected, but Middle East risks

remain; Japan’s annual growth outlook unchanged.

Key Takeaways

Maintaining annual forecasts

A slightly stronger start to Apr-Jun quarter than previously expected

Our cautious view for the second half of the year unchanged

Maintaining annual forecasts: We updated the GDP forecast table to reflect the

second estimate of Q1 (Jan-Mar) GDP. Our overall narrative remains unchanged from

Japan Economics Mid-Year Outlook: Resilience Tested Amid Headwinds (May 12,

2026), and we kept our calendar-year real GDP growth forecasts unchanged at

+0.4% for 2026 and +1.0% for 2027.

A slightly stronger start to Apr-Jun quarter than previously expected: While Q1

growth was revised slightly down, mainly due to weaker capex, recent hard data for

Q2 (Apr-Jun) have been more resilient than our previous assumptions. Taking these

into account, we have made a modest upward revision to our Q2 real GDP growth

forecast (first estimate scheduled for release on August 17). Examples include the

BoJ’s Consumption Activity Index for April (released June 5), bank lending (Loans and

Deposits Survey, released June 8), and April industrial production (released May 29).

Net external demand is likely to make a positive contribution to Q2 real GDP growth

due to a decline in imports, although this is likely to be partly offset by a negative