Q1 GDP Beat Aided By Better Consumer/Business Spending

Japan Q1 GDP data came in above expectations, with annualized q/q growth at 1.6% (0.8% forecast). We did see Q4 revised down to -0.1%, versus 0.1% originally reported. In q/q terms (non-annualized) we were at 0.4% (0.2% forecast, flat prior). Nominal GDP was also firmer at 1.7% q/q, 1.3% forecast, 1.1% prior. The y/y deflator was slight below estimates, coming in at 2.0%, versus 2.1% forecast.

• The detail showed better consumption (+0.6% q/q, +0.4% forecast) and business spending (0.9% versus -0.3% forecast), but a slightly larger than expected drag from net exports -0.3% (-0.2% forecast).
• The market reaction has been limited. USD/JPY is a touch lower, last around 136.30/35, but this is line with trends elsewhere, with most majors slightly higher against the USD in early dealings. There was little reaction to JGB futures to the data.