Japan Q2 GDP growth was finalized at 0.3% qoq, revised down from 0.4% qoq. The economy grew at annualized pace of 1.3%, sharply lower than preliminary reading of 1.8%. GDP deflator was finalized at 0.4% yoy, unrevised.
Growth was primarily driven by consumer spending, which grew 0.6% qoq. While continued growth in private consumption is expected ahead, it could take a hit from the planned sales tax hike in October.
Meanwhile, business investment was weak and just grew 0.2% qoq. Considering global slowdown and uncertainties from trade tensions, business investment has already shown some resilience. Yet, as US-China trade war intensified in Q3, there is more headwind for businesses for the rest of the year.
Also from Japan, current account surplus narrowed to JPY 1.65T in July, slightly below expectation of JPY 1.70T.
