Japan's Cabinet Office revised the country's GDP growth for the first quarter of 2026 down to 1.8%, from an initial estimate of 2.1%, primarily due to a 0.7% contraction in business investment. Despite this, the figure surpassed economists' expectations of 1.3% growth. Private consumption, which comprises over half of Japan's economy, increased by 0.3%, reflecting ongoing household spending despite inflationary pressures. The economic landscape is further complicated by rising energy prices linked to geopolitical tensions in West Asia, particularly following US-Israeli actions against Iran that have threatened oil supply routes. In response, the Japanese government, led by Prime Minister Sanae Takaichi, introduced a $19 billion budget to alleviate the impact of these rising costs on households and businesses. Attention now turns to the upcoming Bank of Japan meeting, where policymakers will evaluate the economic situation and consider potential interest rate adjustments, balancing inflation concerns with the risks of slowing investment and geopolitical instability.