Japan: Expect Q2 real GDP growth of 1.4% q-o-q annualized - Nomura
|Analysts at Nomura offer a sneak peek into Friday’s Japanese Q2 GDP figures due to be reported at 2350 GMT.
Key Quotes:
“We expect Q2 (April-June) real GDP growth of 1.4% q-o-q annualized (+0.3% q-o-q).
This would be the first quarter-on-quarter growth in two quarters (since Q4 2017).
We think exports and private-sector demand continued to grow in Q2.
We think consumer spending recovered in Q2 and helped to drive overall growth in GDP, having weakened in Q1 due to the poor weather.
We also think capex continued to grow at a moderate pace.
The June BOJ Tankan pointed to strong appetite for capex in FY18, suggesting continued firm demand for labor-saving technologies and strong construction demand in major cities in Japan.
We think exports continued to grow in Q2 due to the solid US economy.
That said, we think slower economic growth in Europe since the start of the year, coupled with an economic slowdown in emerging markets, has caused Japanese export growth to lack momentum.
Nevertheless, we expect a fairly strong contribution from overseas demand, as imports likely fell in Q2 on the heels of weak domestic demand in Q1.
We expect gradual growth overall, albeit not to the same extent as through mid-2017 when GDP grew considerably more than the potential growth rate.”
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