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Japan seen upgrading Q2 GDP on stronger business spending: Reuters poll

Japan seen upgrading Q2 GDP on stronger business spending: Reuters poll

FILE PHOTO: A staff wearing a face shield sells fish at Japan's supermarket group Aeon's shopping mall as the mall reopens amid the coronavirus disease (COVID-19) outbreak in Chiba, Japan May 28, 2020. REUTERS/Kim Kyung-Hoon/Files

TOKYO : Japan's economy likely grew more than initially reported in the second quarter thanks to stronger business spending, a Reuters poll showed, though a resurgence of coronavirus infections is seen weighing on growth going forward.

Separate data due next week will likely show household spending rebounded in July from a year earlier, in a sign consumer sentiment recovered somewhat before the highly infectious Delta variant spread rapidly in Japan.

Revised gross domestic product (GDP) data is expected to show Japan's economy grew an annualised 1.6per cent in April-June, more than a preliminary reading of 1.3per cent growth, the poll of 19 economists showed.

The stronger figure was in part due to an expected 2.0per cent rise in capital spending, a larger increase than a preliminary 1.7per cent gain, analysts projected. The world's third-largest economy contracted 1.0per cent in the first quarter.

"The view that Japan's economy remained stagnant in April-June is unchanged," said Saisuke Sakai, senior economist at Mizuho Research Institute.

"Dragged down by the state of emergency curbs, the recovery was weak compared to the dip in January-March."

Household spending likely rose 2.9per cent year-on-year in July after a 5.1per cent fall in June, the poll also showed, as the Olympics opened in Tokyo and a flattered comparison to the slump seen a year earlier.

Household spending was seen up a seasonally adjusted 1.1per cent in July from the previous month, according to the poll.

The government will release the revised second-quarter GDP data at 8:50 a.m. local time on Sept. 8 (2350 GMT on Sept 7), and announce household spending data at 8:30 a.m. on Sept. 7 (2330 GMT, Sept. 6).

Other data releases next week are expected to show the current account balance was in a surplus of 2.3 trillion yen in July, up from 905.1 billion yen in the prior month, analysts said.

(Reporting by Kantaro Komiya; Editing by Daniel Leussink and Sam Holmes)

Source: Reuters

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