In actual phrases, which exclude the consequences of value fluctuations, GDP expanded 0.5% from the earlier quarter. The annualized development price was revised down from the preliminary estimate of two.1%.

The foremost issue behind the downgrade was capital funding, which was revised from a 0.3% improve within the preliminary information to a 0.7% decline. Spending on software program and manufacturing equipment was notably weak, weighing on total financial development.

Private consumption, which accounts for greater than half of Japan’s economic system, remained largely unchanged from the preliminary estimate, rising 0.3% from the earlier quarter. Growth was supported by elevated spending on eating companies and online game software program.

The revised figures point out that whereas client spending remained resilient, weaker enterprise funding slowed the tempo of financial growth through the first three months of 2026.

Source: テレ東BIZ

The sector has entered a tough interval as disruptions in power markets threaten to lift prices throughout the petrochemical provide chain. While a number of main chemical producers reported improved earnings for the fiscal yr ended March 2026, the outlook stays clouded by geopolitical uncertainty.

According to Miyamoto, senior analyst at SMBC Nikko Securities and a three-time top-ranked chemical substances analyst within the Nikkei Veritas analyst survey, the influence of the Middle East scenario stays extremely unpredictable. Nevertheless, many firms have maintained earnings development forecasts for the present fiscal yr regardless of factoring in important adverse results from greater prices and weaker market circumstances.

Mitsui Chemicals, for instance, estimates that Middle East-related disruptions might scale back working revenue by round 15 billion yen. Sumitomo Chemical has additionally included an roughly 10 billion yen adverse influence into its annual forecast.

Japan stays closely depending on the Middle East for power and petrochemical feedstocks. Roughly 96% of the nation’s crude oil imports originate from the area, whereas 70% to 80% of naphtha—the important thing uncooked materials used to provide petrochemicals—additionally comes from Middle Eastern suppliers.

Although the federal government has promoted diversification of procurement sources, analysts warn that greater feedstock costs have gotten unavoidable. Imports of naphtha from the United States have elevated considerably in contrast with earlier years, serving to to ease provide considerations. However, home benchmark naphtha costs are anticipated to rise sharply through the April-to-June quarter, doubtlessly growing prices for a variety of downstream merchandise.

Higher costs might ultimately weaken demand, creating further challenges for producers.

The scenario is especially extreme for Japan’s ethylene business. Domestic ethylene plant utilization fell to only 67% in April, the bottom stage on file. Some downstream producers have already been pressured to chop manufacturing of sure merchandise.

Despite the slowdown, stock ranges of general-purpose plastics stay comparatively wholesome at round three months of provide, permitting the business to take care of total market provide for now.

The results are starting to unfold past the chemical sector itself. Companies within the meals and packaging industries have began decreasing their use of some petroleum-based supplies derived from naphtha. Analysts warning that if such measures turn out to be everlasting, demand for petrochemical merchandise might face long-term structural declines.

At the identical time, business leaders are more and more advocating restructuring as an answer to continual oversupply.

The push for consolidation has been pushed largely by China’s large growth of petrochemical manufacturing capability over the previous decade. Large-scale ethylene crops inbuilt China, together with new services within the United States and the Middle East, have disrupted world supply-demand balances and squeezed profitability all through the business.

As a consequence, many Japanese petrochemical operations are presently producing both losses or solely minimal revenue margins, growing strain on firms to pursue strategic restructuring.

Recent developments embody Resonaq Holdings separating its petrochemical enterprise and Kurasus Chemical planning a partial spin-off itemizing, following a mannequin that has attracted rising consideration amongst traders. Market individuals view such strikes as potential catalysts for bettering effectivity and profitability throughout the sector.

In addition to restructuring efforts, demand for semiconductor-related supplies stays a vibrant spot. The restoration of the semiconductor market and continued funding in superior chip manufacturing are anticipated to assist earnings for chemical firms with publicity to high-value digital supplies, serving to offset weak spot in conventional petrochemical operations.

While uncertainty surrounding Middle East power provides stays a significant concern, analysts imagine business consolidation and semiconductor-related development alternatives might present vital assist for Japan’s chemical sector within the years forward.

Source: テレ東BIZ