Japan Q2 GDP weakens on slower investment spending

TOKYO - A weaker-than-expected GDP outturn for the second quarter has dented surging hopes of a quick recovery in Japan, and raised new questions about whether the Government will allow a planned consumption tax hike to go ahead as scheduled in 2014. Q2 GDP rose at an annualised rate of 2.6% s.a. (consensus: 3.8%), and the Q1 outturn was revised down to 3.8% (from a previous estimate of 4.1%). The outturn was influenced by a further contraction in capital spending.