Key facts
- Japan's economy is expected to have grown for a third consecutive quarter in April-June.
- Gross domestic product (GDP) likely expanded an annualized 2.0% in the second quarter.
- Household spending fell 3.3% year-on-year in June, the seventh consecutive monthly decline.
- Private consumption is projected to have grown 0.5% in the second quarter.
- Capital expenditure is expected to have grown 0.4% in the second quarter.
Japan's economy is anticipated to have expanded for a third consecutive quarter in April-June, with forecasts suggesting an annualized GDP growth of 2.0%. This growth is attributed to solid domestic demand and a decrease in imports, which offset challenges from global conflicts. Private consumption is expected to have grown 0.5%, and capital expenditure 0.4%. However, household spending unexpectedly fell 3.3% year-on-year in June, marking the seventh consecutive monthly decline and a 6.4% drop month-on-month. Despite this, real wages saw a 1.6% increase in June. This mixed economic picture will be a key factor for the Bank of Japan as it contemplates potential interest rate hikes, possibly as early as September.