Sunday, September 8, 2019 - 20:48

MNI DATA IMPACT: Japan Q2 GDP Revised Lower on Capex

--Japan Q2 GDP Rev +0.3% Q/Q; Prelim +0.4%; MNI Median +0.3%
--Japan Q2 Annualized GDP Rev +1.3% Vs +1.8%; MNI Median +1.3%
--Japan Q2 Capex Rev +0.2% Q/Q; Prelim +1.5%; Median +0.8%
--Japan Q2 Capex Contribution Revised At +0.0 Point Vs. +0.2 pt
--Japan Q2 Consumption Unrevised at +0.6% Q/Q
--Japan Q2 Consumption Contribution Unrevised +0.3 Point
--Japan Q2 Net Export Contribution Unrevised -0.3 Pct Point

TOKYO (MNI) - Japan's economy grew at a slower pace than initially estimated in the April-June quarter, with business investment weaker than first estimated, revised (second preliminary) data released by the Cabinet Office Monday showed.

The economy rose 0.3% on quarter, or an annualized 1.3%, in Q2, thanks to strong private consumption and public investment.

--Real Q2 GDP was revised down from the preliminary estimate of +0.4% and 1.8% respectively, in line with the MNI median forecast.

--The downward revision came mainly from lower capital investment, revised down to a 0.2% gain (the MNI median forecast was +0.8%) from a preliminary +1.5%. There was a 0.2% fall in Q1.

--The contribution to overall GDP from capital investment was revised down to +0.0 percentage point from a rounded +0.2pp initially.

--Private consumption, which accounts for about 60% of GDP, was unrevised at 0.6% on quarter. It pushed overall GDP higher by an unrevised rounded +0.3 pp.

--The contribution of net exports -- exports minus imports -- was also unrevised at -0.3 percentage point.

--The contribution of private-sector inventories to total domestic output was

revised to -0.0 percentage point from -0.1 percentage point and the GDP contribution of public investment was revised to 0.1 percentage point from 0.0 percentage point.

--Japan's economy is expected to remain solid for the third quarter, thanks to the front-loaded rise in demand before the consumption tax hike, although exports are likely to remain weak amid the slowdown in overseas economies.

--Bank of Japan economists expect capital investment needed to deal with the labor shortage to remain solid among non-manufacturers, but they are worried that the heightened uncertainties over the global economy will prompt firms to put off implementation plans.

--The average economist forecast for Q3 GDP growth is annualized at 1.30%, according to the latest monthly ESP Survey of 37 economists by the Japan Center for Economic Research conducted from July 25 to August 1.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
--MNI London Bureau; tel: +44 203-586-2225; email:

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