Guys shop at the Bic Camera Yurakucho electronics store on June 5, 2018 in Tokyo, Japan.
Tomohiro Ohsumi | Getty Replicas News | Getty Images
Japan’s economy grew at a slower pace than initially estimated in the second neighbourhood on the back of softer capital spending, signaling strains on the economy from weaker global growth and the U.S.-China dealings war.
Weakness in the global economy and trade protectionism have emerged as risks to growth and increased pressure for the Bank of Japan (BOJ) to lengthen stimulus when it meets later this month.
The economy grew an annualized 1.3% in April-June, weaker than the preliminary study for 1.8% annualized growth, Cabinet Office data showed Monday.
The reading was in line with the economists’ median forecast for a 1.3% achievement.
The annualized growth rate translates into quarter-on-quarter expansion of 0.3% from January-March, compared with a opening reading for a 0.4% gain.
Capital spending rose just 0.2% from the previous quarter, much cut than a preliminary 1.5% rise and the median forecast for a 0.7% increase.
Private consumption, which accounts for some 60% of flagrant domestic product, advanced 0.6% from the previous three months, matching the preliminary reading.
Net exports – or exports minus denotes – subtracted 0.3 percentage point from revised GDP growth, while domestic demand added 0.6 share point.
The outlook for the world’s third-largest economy remains clouded as risks from declining manufacturing overseas and at adept in hit exports hard.
Analysts have also warned of a possible drop in domestic consumption after Japan raises its sales tax to 10% as diagramed next month. That, in turn, threatens to leave the economy without a growth driver unless global market demand rebounds.
BOJ Governor Haruhiko Kuroda has kept the door ajar for cutting interest rates further into dissenting territory, saying last week such move is among the bank’s policy options.
Speculation is growing that the BOJ could nonchalance policy as early as this month to prevent the yen from spiking, which could become increasingly likely if the U.S. Federal Formality and the European Central Bank unveil new easing measures.