Goldman Sachs have raised their tracking estimate of Japanese Q2 real GDP growth to +2.4% qoq annualised (from +1.8%)
GS cite:
- Following strong activity data
And note the still slow wage growth:
- Despite stronger Japanese growth, we have yet to see a pickup in price and wage inflation.
- We are below consensus for Thursday's June wage report, where we expect overall wages to rise only 0.3%, a slowdown from May levels.
- However, if the economy continues to strengthen, we will eventually see material shortages in labour and product markets, and we forecast $/Yen at 118 in 12 months (currently 110)
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'June wage report' GS is referring to is due tomorrow (Friday 10am, Japan time, which is at 0000GMT)
Labor Cash earnings y/y
- (consensus) expected +0.5%, prior +0.6%
Real cash earnings
- expected +0.1% y/y, prior flat at 0.0%
