MNI BRIEF: Japan Q3 GDP Revised Lower On Spending

Japan's economy contracted at a faster pace than initial estimates in Q3, down 0.7% q/q or 2.9% annualised from the first preliminary -0.5% or -2.1% annualised estimate, as authorities revised private consumption lower, second preliminary data released by the Cabinet Office showed on Friday.

The revised data showed capital investment fell 0.4% q/q, revised up from a 0.6% drop, while its negative contribution remained at -0.1 pp. Private consumption, which accounts for about 60% of Japan's GDP, was revised down to -0.2% q/q from -0.0% q/q, pushing overall GDP down 0.1 pp, widening from -0.0 pp.

The contribution of net exports remained at -0.1 pp. Private-sector inventories to total domestic output contributed a revised -0.5 pp from -0.3 pp. Public investment fell 0.8% q/q, revised down from -0.5%, but the GDP contribution of public investment was unrevised at -0.0 pp.

The weaker GDP will add to the Bank of Japan’s concern over softer private demand, although bank officials doubt whether Japan’s economy will derail from a moderate recovery path immediately.