Japan's Gross Domestic Product Expands 1.5% More Than Initial Expected During The Second Quarter

The Japanese economy released its report today, showed that the Japanese economy expanded more than initial expected during the second quarter of the year, as the nation's export (which the main pillar of the growth) increased and surpassed imports, and an upward revision in capital expenditure.

Japan's GDP final reading during the second quarter, which grew 0.4%, compared with a previous expanded 0.1% in the first quarter, while the actual reading came inline with analysts' expectations, which noted that.

Moreover, Japan's annualized GDP final reading rose 1.5% in the second quarter, and the actual reading is higher than previous reading 0.4%, while the actual reading came as expected.

Also, the annualized GDP deflator rose -1.7% during the second quarter, compared with the previous of -1.8%, while analysts' expectations referred to -1.8%.

The world growth may retreat in upcoming period, whish has a negative effect on the economic recovery, while the Yen's advance to a 15 year high against the dollar, reflection that the nation's export may derail during the coming period.

The Bank increased its credit program to 30 trillion yen ($232 billion) during the Bank's emergency meeting, and in June unveiled a 3 trillion yen, which encouraged short-term loans. The BOJ is unlikely to ease policy any time soon, it will “naturally consider what it can do” if the global economy stagnates and the yen's gains accelerate.

On the other hand, the Bank of Japan decided to keep borrowing costs near zero at 0.10% during the month of September in order to support the economy's recovery as the bank gauges the risk the Yen's advance, and the U.S. release of important data, which showed that the credit program expanded.

Meanwhile, Japan's merchandise trade balance surplus widened to 804.2 billion Yen during July, following a previous surplus 687 billion Yen, while the nation's export, which the main pillar of growth in the nation, is losing steam after the economy expanded at the slowest pace in three-quarter as global demand.

Japanese government is working to support the economy recovery as offering shoppers incentives to buy energy-efficient cars and electronics, helping to increase consumer spending, which accounts for more than 50% of the economy.

The central bank's assessment for the economy remain unchanged as it said in the statement accompanied the rate decision "the nation will continue to expand", adding that there is no sufficient momentum to guarantee a sustaining recovery in domestic and private demand.