MNI DATA IMPACT: Japan Q1 GDP Unrevised; Capex Revised Lower

Japan's economy contracted 0.6% q/q in the first quarter, unrevised from the preliminary reading, updated data released by the Cabinet Office Monday showed.

On an annualized basis, the economy fell 2.2% y/y, also unchanged from the previous report, with private consumption unrevised. Capital investment rose 1.7% q/q, revised down from a 1.9% in the first preliminary report.

The positive contribution to the overall number was from capital investment was unchanged at 0.3 percentage point.

Private consumption, which accounts for about 60% of Japan's GDP, was unrevised at -0.8% q/q, pushing overall GDP lower by an unrevised rounded -0.4 pp.

The contribution of net exports -- exports minus imports -- was unrevised at -0.2 percentage point.

Q2 OUTLOOK

Japan's economy is expected to contract at a far greater rate in Q2 as the ongoing impact of the coronavirus pandemic weighs. Bank of Japan economists expect exports, production and private consumption, to remain weak. The average economist forecast for Q2 GDP is annualized at -23.53%,
according to the latest monthly ESP Survey of 35 economists by the Japan Center for Economic Research conducted from June 25 to July 6.

The BOJ still holds to the baseline scenario based on the view by the International Monetary Fund that Japan's economy is expected to gradually improve from the second half of this year.