Japan's economy grew by just 0.1% from April to June, increasing speculation that the central bank will delay an interest rate rise until September.
Japanese exports were weaker in the April-to-June quarter
The Bank of Japan had been expected to raise rates from 0.5% to 0.75% this month, but analysts said the weak data would probably delay the move.
They also pointed to fears over the recent global stock market turmoil and the mortgage market woes in the US.
Japan's weak second-quarter economic growth was led by lacklustre exports.
The 0.1% economic growth figure was below market expectations of 0.2%.
US mortgage woes
The government's latest economic figures came as the Bank of Japan announced another cash injection of 600bn yen (US$5bn, £2.5bn) into money markets, its second intervention in two trading days.
In a similar move to the Federal Reserve in the US, the Bank of Japan is moving to ease fears of a credit crunch led by financial difficulties at US investment funds exposed to weakness in the sub-prime mortgage sector.
Sub-prime mortgages are higher-interest loans given to higher-risk borrowers or those on low incomes.
As US interest rates have risen, a growing number of these borrowers have defaulted.
"Growing concerns for a negative impact on the economy from the US sub-prime lending woes through market instability could lead the Bank of Japan to hold off on a rate hike until September," predicted Morgan Stanley economist Takehiro Sato.