Japan's economy is anticipated to have experienced a slower contraction than initially indicated in the January-March period, primarily attributed to increased capital spending, according to a Reuters poll conducted on Friday. That being said, uncertainties persist, casting shadows over the future prospects.
Economists expect a resurgence in economic growth this quarter, buoyed by tax reductions and escalating wages. However, the weakening yen is projected to dampen consumption due to heightened import expenses. Aside from that, disruptions encountered by certain automakers are expected to exert additional pressure.
Cabinet Office data set to be released on Monday is anticipated to reveal a 1.9% year-over-year contraction in the gross domestic product (GDP) for the first quarter, marginally surpassing the previously reported 2.0%.
The updated figures indicate a quarterly contraction of 0.5%, aligning with the initial projections.
Revised GDP data is anticipated to reveal a 0.7% decrease in capital spending during the first quarter, a slight improvement from the initial estimate of a 0.8% decline. This adjustment primarily contributed to the upward revision of GDP.
Initial data indicated a 0.7% decline in private consumption in the first quarter, driven by escalating living expenses resulting from a weakened yen, which strained household budgets.
External demand, defined as exports minus imports, contributed to an overall GDP reduction of 0.3 percentage points.
Data to be released on June 12 by the Bank of Japan is anticipated to reveal that the corporate goods price index, which gauges the prices of goods exchanged between companies, increased by 2.0% year-over-year and 0.4% month-over-month in May.
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