Improving investment leads to upward revision to Japan’s Q2 GDP

TOKYO – Japan’s Q2 GDP has been revised upwards to 3.8% saar (0.9% q/q sa) from the preliminary reading of 2.6% saar (0.6% q/q sa), as capital spending, the missing ingredient until now in Japan’s economic revival, posted a strong increase. In particular, private non-residential investment growth was revised up to 1.3% q/q sa in Q2 from a preliminary reading of -0.1%, and public investment growth was revised up to 3.0% q/q sa (1st preliminary reading: 1.8%).

Looking ahead, BBVA Bank saus it expects Japan’s recovery to continue in the second half, adding that its current 1.7% full-year growth projection for 2013 now looks conservative. “The data is further evidence that Abenomics is working to revive growth, and should help the Government make its case to proceed with the planned consumption tax hike in 2014-15, which is to be formally decided in early October,” BBVA says.  www.bbvaresearch.com (ATI).