April-June real GDP was revised up from the preliminary estimate, mainly due to a narrower decline in capital investment. Against the backdrop of domestic and external economic conditions, Japan's economy maintained its gradual recovery, supporting the BOJ's rate-hike path.
The Cabinet Office's revised estimate for real GDP in the April-June quarter showed a 1.4% increase on an annualized quarter-on-quarter basis, revised up from the preliminary 1.1% increase. On a quarter-on-quarter basis, GDP rose 0.4%, up from the preliminary 0.3% increase. Private consumption improved slightly, turning from a 0.02% decline to a 0.01% increase.
Capital investment fell 0.9% quarter on quarter, a modest improvement from the preliminary 1.2% decline. According to the Ministry of Finance's preliminary Financial Statements Statistics of Corporations, capital investment by all industries excluding finance and insurance rose 3.6% in the April-June quarter on a basis excluding software, exceeding the market forecast of a 1.6% increase.
The April-June growth rate was revised up, and the Japanese economy maintained its resilience despite headwinds such as higher raw material prices. The results were consistent with the government's and BOJ's assessment of the economy and supported the BOJ's rate-hike path as it advances normalization.
Experts noted that both capital investment and private consumption were revised up, albeit modestly, indicating that domestic demand remains stable. The BOJ is expected to remain in a phase of monitoring developments as the possibility of further rate hikes is considered.