Japan Could Revise Second Quarter Growth Upwards to 3-4 Percent

Six research institutes said Monday that robust capital spending data for the April-June period, released earlier in the day, will lead the government to revise upward Japan’s annualized economic growth rate for the quarter from a preliminary 2.6 percent to 3.0-4.0 percent.

The upward revision of gross domestic product growth is expected to encourage Prime Minister Shinzo Abe to go ahead with the planned rise in the consumption tax rate to 8 percent next April from the current 5 percent.

“The prime minister will make a decision in early October in view of various economic indicators” including the revised GDP data due out Sept. 9, economic and fiscal policy minister Akira Amari said in a speech in Fukuoka on Monday.

The indicators may also include the Bank of Japan’s quarterly business confidence survey to be released in September and employment data for August to be released Oct. 1.

Amari said earlier Abe may decide on whether to implement the sales tax rise before the Asia-Pacific Economic Cooperation forum summit starts on Oct. 7.

Although preliminary April-June GDP data included a decline in nonresidential investment, the Finance Ministry said Monday business investment in the quarter rose from a year earlier for the first time in three quarters.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza