Japan's economy grew at an annual rate of just 0.5% in the second quarter of 2007, slowing sharply as exports and consumer spending lost steam.
The world's second largest economy expanded for a 10th straight quarter, helped by brisk spending by companies on new plant and equipment.
But the sharp slowdown further dampened expectations that the Bank of Japan might raise its super-low interest rates next week, particularly in light of recent financial market turmoil sparked by problems in the US housing sector.
Japan's gross domestic product (GDP) grew by just 0.1% in the three months to June as the economy hit the brakes after the first quarter's 0.8% expansion, figures from the Cabinet Office showed. The figures fell well short of analysts' expectations.
Concerns grew about sluggish consumer spending and slowing exports to the US. Private consumption growth cooled sharply to a quarterly rate of 0.4% from 0.8% in Q1, while export growth weakened to 0.9% from 3.4%.
