Japan’s economy to pick up in Q2 despite slowing global demand -Reuters poll

A cargo ship and containers are seen at an industrial port in Tokyo, Japan, Feb 15, 2022. REUTERS/Kim Kyung-Hoon/File photo

TOKYO  – Japan’s economy likely grew an annualized 3.1 percent in April-June to mark a third straight quarter of expansion, according to a Reuters poll, helped by resilience in exports despite slowing global demand.

The increase would follow an annualized 2.7 percent in the first quarter. On a quarter-on-quarter basis, the economy probably expanded 0.8 percent.

“The data will show Japan’s economy is recovering moderately with consumption and capital expenditure maintaining momentum,” said Shinichiro Kobayashi, an economist at Mitsubishi UFJ Research & Consulting.

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The data would be welcomed by the Bank of Japan which wants a slow but steady phase-out of its massive stimulus program and took steps last week to allow long-term interest rates to rise more.

External demand likely added 0.9 percent point to gross domestic product growth in April-June, after shaving off 0.3 percent point in the first three months of this year, the poll showed.

Capital expenditure is expected to have risen 0.4 percent after a 1.4- percent increase and the poll called for private consumption to have edged up 0.1 percent, slowing from a 0.5- percent gain.

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“Consumption has been recovering, mainly for services industries as the economy has re-opened. But the recovery may have run its course as rising inflation weighs on real income,” said Ryutaro Kono, chief Japan economist at BNP Paribas.

The government will release the preliminary second-quarter GDP data on 8:50 a.m. Tokyo time on Aug. 15.