MNI DATA PREVIEW: Japan Q2 GDP Seen Revised Up From Initial

Japan's economy expanded at a faster pace than initially estimated in the April-June quarter as capital investment appeared to be higher than initially expected, economists predicted in the wake of a key government survey.

The median forecast by six economists for revised Q2 GDP is +0.5% on quarter, or an annualized +1.9%, compared with the preliminary estimate of +0.3% q/q, or an annualized +1.3%. The forecasts ranged from +0.4% to +0.6% q/q, and +1.6% to +2.3% annualized, see: MNI DATA SURVEY: Japan Revised GDP for April-June.

The Cabinet Office will release revised (second preliminary) GDP data for the April-June quarter at 0850 JST on Wednesday, September 8 (2350 GMT on Tuesday, September 7).

HIGHER CAPEX, SPENDING

In April-June, capital investment is forecast by economists to be revised up to +2.0% on quarter from the initial reading of +1.7%, with forecasts ranging from +1.5% to +2.5%, based on the results of the Ministry of Finance's survey released on Wednesday.

Combined capital investment by non-financial Japanese companies excluding software rose 3.2% q/q in the second quarter of 2021, widening from +0.5% in Q1, a quarterly revised survey released by the Ministry of Finance on Wednesday showed.

GOING FORWARD

Economists expected public investment to be unrevised at -1.5% q/q in Q2.

Going forward, economists expect Japan's economy in the third quarter to remain weak due to the state of emergency to combat the spread of Covid-19 and supply restrictions caused by shortages of semiconductors and auto parts.

Economic growth is expected to accelerate in the fourth quarter on the premise that private spending recovers due to the spread of vaccinations, economists predicted.