Japan's Economy Surpasses Expectations with Upgraded Q2 Growth

The Japanese economy showed stronger growth than initially estimated in Q2, driven by improved capital expenditure.

GDP expanded an annualized 1.4% from April to June, up from a preliminary estimate of 1.1%. Economists had forecasted a 1.6% increase.

The upgrade was attributed to revised capital spending data, which showed Japanese companies increased plant and equipment investment by 1.6% in the second quarter compared to last year.

Kento Minami, senior economist at Daiwa Securities, said that despite potential downward pressure from the Middle East situation, growth around this level is notable and suggests that the Bank of Japan can move ahead with rate hikes.