Japan Q2 GDP contraction was revised down to -7.9% qoq, from -7.8% qoq. In annualized term, GDP contracted -28.1% versus preliminary reading of -27.8%. GDP deflator was finalized at 1.3% yoy. In July, labor cash earnings dropped -1.3% yoy, versus expectation of -1.6% yoy. Household spending dropped -7.6% yoy, versus expectation of -3.7% yoy. Current account surplus narrowed to JPY 0.96T. Bank lending rose 6.7% yoy in August, versus expectation of 6.3% yoy.
Economy Minister Yasutoshi Nishimura said “the economy was in a severe state in April-June because we intentionally halted activity to contain the coronavirus “. Nevertheless “it has recently shown signs of picking up”.
“Some positive corporate spending to adapt to a new lifestyle is seen, such as capex to boost production capacity, spending on telecom equipment,” he added. On the other hand, “household income is rising so the economy likely to continue recovering but must watch impact on the renewed rise in infection numbers, hot temperatures on consumption.”
