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TOKYO (MNI) – Japan’s real gross domestic product for the
April-June quarter was revised down to +0.2% (+0.16%) on quarter, or an
annualized +0.7%, from the initial estimate of +0.3% (+0.34%), or an
annualized +1.4%, mainly due to a downward revision to private-sector
inventories, the Cabinet Office said on Monday.

The revised Q2 GDP came in slightly weaker than the median
economist forecast in an MNI survey for +0.2% (annualized +1.0%).

Meanwhile, the Q1 GDP was revised down slightly to +1.3% q/q
(annualized +5.3%) from +1.3% (annualized +5.5%) reported earlier.

Q2 domestic demand rose 0.2% q/q, revised down from a preliminary
+0.4%. It added 0.2 (+0.24) percentage point to Q2 GDP, revised down
from a preliminary +0.4% (+0.42) point.

Meanwhile, Japan’s net exports — exports minus imports — trimmed
0.1 percentage point off the Q2 economic growth, unchanged from the
preliminary estimate. The contribution to GDP was also unchanged at -0.1
(-0.08) percentage point.

In domestic demand, private-sector inventories lowered the Q2 GDP
by 0.2% point, revised down from a preliminary -0.0% point.

Business investment, the second largest component of GDP, rose 1.4%
q/q, revised down slightly from a preliminary +1.5% but its contribution
to the Q2 growth was unchanged at +0.2 percentage point.

Government consumption was also revised down to +0.2% q/q in
April-June from a preliminary +0.3%, which made its contribution to GDP
zero, revised down from +0.1 percentage point.

Private consumption, the largest component of GDP, rose an
unrevised 0.1% q/q in Q2.

Private-sector housing investment rose 0.9% q/q, revised up from a
preliminary +0.8%.

The downward revision to the annualized rate of GDP growth in Q2
makes it even more difficult for Japan to hit the government target of
+2.2% growth for this fiscal year amid the global slowdown.

The Cabinet Office now said a quarter-on-quarter rise of 0.4% would
be needed in both Q3 and Q4 to achieve the goal.

Economists on average expect Japan’s economic growth to slow down
sharply to an annualized rate of +0.47% in July September and +0.62% in
October-December, the latest monthly survey by the Japan Center for
Economic Research released on Friday showed.

Mild deflation lingered in the second quarter, the GDP data showed.

The GDP deflater fell 0.9% on year in Q2, revised up from a
preliminary -1.1%. It remains the smallest drop since no change in Q3 of
2009. The domestic demand deflator slipped 0.6% y/y, also revised up
from a preliminary -0.7%.

** MNI Tokyo Newsroom: 81-3-6860-4820 **

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