MNI DATA IMPACT: Japan Q3 GDP Revised Higher On Higher Capex

Japan's economy grew at a faster rate than previous forecasts the previously estimated as capital investment and private consumption were revised higher, according to second preliminary data released by the Cabinet Office on Tuesday.

The economy expanded 5.3% q/q, or an annualized +22.9%, compared with the first preliminary estimates of +5.0% q/q and an annualized +21.4%.

Elsewhere in the revised data, capital investment fell 2.4% q/q, revised up from the 3.4% fall in the preliminary release. The negative contribution from capital investments was revised to -0.4 percentage point from -0.6 pp.

Private consumption, which accounts for about 60% of Japan's GDP, was revised to +5.1% q/q from +4.7%, pushing overall GDP higher by a revised rounded 2.8 pp from 2.6 pp.

The contribution of net exports -- exports minus imports -- was revised at +2.7 percentage point from +2.9 pp.

Private-sector inventories to total domestic output contributed an unrevised -0.2 percentage points and the GDP contribution of public investment was unrevised at +0.0 pp.

OUTLOOK

Japan's economy is expected to slow in Q4 from the sharp recovery in Q3 as a result of the continuing spread of the coronavirus.

Bank of Japan economists see both exports and industrial production remaining firm in Q4 but are worried about weaker private consumption in December.

The average economist forecast for Q4 GDP growth is annualized at +4.04%, according to the latest monthly ESP Survey of 34 economists by the Japan Center for Economic Research conducted from October 29 to November 6.