Japan’s economy to pick up in Q2 despite slowing global demand: Reuters poll

Japan’s economy likely grew an annualised 3.1% in April-June to mark a third straight quarter of expansion, according to a Reuters poll, helped by resilience in exports despite slowing global demand.

The increase would follow an annualised 2.7% in the first quarter. On a quarter-on-quarter basis, the economy probably expanded 0.8%.

“The data will show Japan’s economy is recovering moderately with consumption and capital expenditure maintaining momentum,” said Shinichiro Kobayashi, an economist at Mitsubishi UFJ (NYSE:MUFG) Research & Consulting.

The data would be welcomed by the Bank of Japan which wants a slow but steady phase-out of its massive stimulus programme and took steps last week to allow long-term interest rates to rise more.

External demand likely added 0.9% point to gross domestic product growth in April-June, after shaving off 0.3% point in the first three months of this year, the poll showed.

Capital expenditure is expected to have risen 0.4% after a 1.4% increase and the poll called for private consumption to have edged up 0.1%, slowing from a 0.5% gain.

“Consumption has been recovering, mainly for services industries as the economy has re-opened. But the recovery may have run its course as rising inflation weighs on real income,” said Ryutaro Kono, chief Japan economist at BNP Paribas (OTC:BNPQY).

The government will release the preliminary second-quarter GDP data on 8:50 a.m. Tokyo time on Aug. 15.
Source: Reuters