Japan recorded modest economic growth in the April–June quarter, overcoming the pressure of steep US tariffs, official figures showed on Friday. Preliminary data from the Cabinet Office indicated that gross domestic product (GDP) grew 0.3% from the previous quarter, outpacing market expectations of 0.1%. The January–March reading was also revised up to 0.1% growth from a previous estimate of contraction, avoiding what could have been a technical recession.On an annualised basis, the economy expanded 1%, higher than forecasts of 0.4% and following 0.6% growth in the prior quarter, reported news agency AFP. Economists polled by Reuters had anticipated a weaker performance, but robust exports, which contributed 0.3 percentage points to GDP after a sharp drop in Q1, helped support the uptick, according to CNBC. Japan’s trade deficit also narrowed in the second quarter.The improvement offers some relief to Prime Minister Shigeru Ishiba, whose political future has been under strain after his coalition lost its majority in the upper house in July. “This is a welcome sign, but the economy still faces many downside risks,” said Yoshiki Shinke of Dai-ichi Life Research Institute, as quoted by AFP, cautioning that export volumes could come under pressure if automakers adjust pricing to offset tariffs.Japan’s auto sector, a key employer and export driver, has been hit by US duties of up to 27.5%. A recent trade agreement reduced the rate on cars to 15%, but the change has not yet taken effect. Toyota has warned of a $9.5 billion tariff impact this year, while Honda and Sony have scaled back their earlier loss projections.The Bank of Japan recently upgraded its 2025 fiscal growth forecast to 0.6% but warned that global trade tensions and weakening overseas economies could weigh on corporate profits. Analysts, including Marcel Thieliant of Capital Economics, expect growth to slow in the coming quarters, with inflation pressures likely prompting the BoJ to resume tightening in October.