The economy expanded in the second quarter at half the pace the government initially estimated, underscoring the risk of contraction in Japan as Europe's debt crisis caps exports.
Gross domestic product grew an annualized 0.7 percent in the April-June period, the Cabinet Office said Monday, less than a preliminary calculation of 1.4 percent. The median forecast of 26 economists surveyed was for a revised 1 percent gain.
Gridlock in the Diet may limit fiscal stimulus just as the nation's expansion is restrained by weakness in global demand, strength in the yen and the winding down of car-purchase subsidies. A slowdown in Asia may further curtail exports and add to pressure for monetary easing after Chinese data Sunday suggested the region's biggest economy is losing steam.