“Japan Q1 GDP Revision Expected Higher: Reuters Poll”, “The Japanese economy likely contracted at a slightly slower pace than initially reported in January-March due to upgrades to capital spending figures, a Reuters poll showed on Friday (Jan 7), although risks continue to cloud the outlook.” This suggests that while there may be some improvement in the contraction, uncertainties persist regarding the future trajectory of Japan’s economy.
Economists anticipate growth to rebound this quarter, supported by tax cuts and wage increases. However, the weaker yen is expected to elevate import costs, potentially constraining consumption. Additionally, disruptions at certain automakers are likely to exert downward pressure on growth.
Cabinet Office data out on Monday is expected to show the pace of gross domestic product (GDP) contraction narrowed to 1.9 per cent annualised in the first quarter, slightly better than a 2.0 per cent contraction first reported.
“Revised Q1 GDP Figures: Quarter-on-Quarter Contraction Remains Unchanged at 0.5%”
The revised GDP data is anticipated to reveal that capital expenditure, which serves as a key indicator of private demand, declined by 0.7% in the first quarter. This figure has been adjusted slightly upward from the initial estimate of a 0.8% decline, contributing significantly to the upward revision of the GDP.
The preliminary data showed private consumption, which accounts for more than half of the Japanese economy, fell 0.7 per cent in the first quarter, as rising living costs driven up by the weak yen squeezed household finances.
