Japan’s economy grew at an annualized 2.1% in the first quarter of 2026, surpassing analysts’ expectations, government data released Tuesday showed.

GDP rose by 2.1% compared with Reuters-polled analysts’ average estimate of 1.7%, and against the 1.3% in the previous quarter. On a quarter-on-quarter basis, the economy expanded 0.5%, compared with estimates of 0.4%, and improving from the 0.3% growth at the end of 2025.

These figures do not capture the full impact of the Iran war, which started at the end of February. The Bank of Japan has cut its growth forecast for the fiscal year 2026 to 0.5% from 1%, and sharply raised its core inflation outlook to 2.8% from 1.9%. (CNBC – Continue Reading)

Australia’s central bank said raising interest rates for a third consecutive meeting would give the board scope to monitor how households and firms respond to the impact of the conflict in the Middle East that has sent fuel prices surging.

“While it was still uncertain, financial conditions would probably be somewhat restrictive after this decision,” the Reserve Bank said in minutes of its May 5 meeting released Tuesday in Sydney. The record of meeting showed members discussed whether to hike or pause, with eight of the nine-member board resolving there was a stronger case to raise rates to 4.35%. (BBG – Continue Reading)

Veterans from the US Federal Reserve's past crisis-fighting efforts on Monday said incoming Chair Kevin Warsh should focus less on the central bank's balance-sheet size and more on guidelines for how to use it in response to future financial and economic shocks.

The Fed's $6.7 trillion balance sheet, much of it in holdings of US Treasury and mortgage-backed securities, has been criticized by some lawmakers as a sign of Fed interference in financial markets. Warsh has cited it as a cause of past inflation and market distortion, and made reducing it a central part of promised "regime change" at the Fed. (RTRS – Continue Reading)