Japan’s Q2 GDP Growth in Line with Initial Estimates

Japan’s economy grew at a solid and steady pace in the second quarter, closely in line with initial assumptions. Analysts had predicted this performance, highlighting a positive trend in prices and both individual and corporate spending. Despite this growth, there are concerns that possible economic slowdowns in the United States and China could pose risks to Japan’s economic outlook.

The Cabinet Office is expected to release information on Monday to confirm an annualised GDP growth rate of 3.2% in the April-June period, slightly above the initial estimate of 3.1%. Quarterly GDP growth is forecast to remain steady at 0.8%, in line with previous readings.

Capital spending, a valuable gauge of private sector demand, is expected to rise 1% in the second quarter, slightly higher than the 0.9% increase initially claimed. The revision is due to strong growth in corporate investment in facilities and equipment, as indicated by capital spending data released on Monday. Shinichiro Kobayashi, chief economist at Mitsubishi UFJ Research & Consulting, highlighted the robust corporate spending reflected in those figures.

Preliminary data also showed that private consumption, a significant portion of Japan’s economy, rose 1% in the second quarter, the first increase after four consecutive quarters of declines.

Looking ahead, the Bank of Japan is scheduled to release additional information on Sept. 12. That report is expected to show that the corporate goods price index, a measure of the prices businesses charge each other, remained unchanged in August from the previous month.

Reuters contributed to this report.

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