Japan's economy experienced a much more rapid growth than anticipated in the period from April to June, driven by the impact of the country's devalued currency on exports.

During this timeframe, the third-largest global economy witnessed an annualized 6% increase in its Gross Domestic Product (GDP), which is nearly double the growth rate projected by economists. This growth rate marks the most substantial upswing in nearly three years.

The depreciation of the yen played a pivotal role in benefiting exporters, as products manufactured in Japan became more competitively priced for consumers across the world. The Japanese currency has experienced a significant decline against major currencies over recent months, with its value against the US dollar plummeting by over 10% in the current year.

"The favorable GDP figures can be attributed to the weakened yen," stated Martin Schulz, Chief Economist at Fujitsu, in an interview with the BBC.
GDP holds immense significance as a tool for gauging the performance of an economy, aiding businesses in their decisions to expand and hire, and assisting governments in determining appropriate taxation and expenditure levels.

Automakers in the country, including Toyota, Honda, and Nissan, have witnessed boosted profits due to heightened demand for their exports.
Furthermore, the Japanese economy received a lift from an increase in tourist arrivals after the government eased border restrictions at the close of April.

By June, the number of foreign visitors to Japan had rebounded to over 70% of pre-pandemic levels, according to the country's national tourism authority. The anticipated spending by tourists is also expected to deliver a more substantial boost to the economy, following China's lifting of a ban on group travel.

Nonetheless, there remain challenges ahead, particularly concerning the slowdown in the domestic economy. The cooling of domestic economic activity is a significant concern for the latter half of the year.

Marcel Thieliant of Capital Economics pointed out that despite the impressive headline GDP growth, certain aspects of the data were less encouraging. For instance, private consumption, which constitutes over half of Japan's economy, experienced a decline. Despite workers witnessing the fastest wage increase in 28 years, inflation levels near a four-decade high have led to a year-long decrease in real wages.