Japan’s economy edges back into growth in the second quarter of 2021

As per preliminary data, Japan's Gross Domestic Product (GDP) grew by an annualised 1.3% in the second quarter of the year. That came after a 3.7% slump in the previous three months.

The latest figures were far better than the expected gain of 0.7% and came as spending by individuals and businesses bounced back from the initial impact of the coronavirus.

Despite a slight rebound in the second quarter and a record number of gold medals for Japan, the Tokyo Olympics was unlikely to have boosted consumption since the event was held behind closed doors for two weeks.

During the Games, the number of Covid-19 cases in Japan tripled to more than 15,000 a day, with the tally rising above 20,000 for the first time last week.

Official figures show the world's third-largest economy grew at twice the rate forecast in April to June but analysts have warned growth will be modest this quarter after a state of emergency was reimposed to ease the surge in Covid-19 infections.

On the other hand, new data also shows that the economic recovery of its larger neighbour, China, is losing steam.

However, Japan's recovery remains much slower than has been seen in other advanced economies like the US, which recorded a 6.5% jump in GDP for the second quarter of the year.

Japan's relatively weak rebound highlights how the government has struggled to contain the pandemic.

Japan’s Economy Minister Yasutoshi Nishimura said, "I have very mixed feelings about this GDP result".

"Our priority is to prevent the spread of the virus. It's very bad for the economy for this situation to drag on," he added.

Last year, Japan's economy shrank by more than 4.8%, its first contraction in more than a decade.

In Tokyo, Japan's benchmark Nikkei share index closed 1.6% lower on Monday, its third session of losses in a row.

Meanwhile, in China factory output and retail sales both rose more slowly than expected last month, compared to a year ago.