Japan's GDP Growth Revised Higher, Boosting BoJ Rate Hike Odds

Japan's economy has expanded for a third consecutive quarter, according to revised second-quarter GDP data. The nation's GDP grew by an annualized rate of 1.4%, up from the initially estimated 1.1%. Business fixed investment was a significant contributor to this upward revision, with new data showing a decline of 0.9% in the previous quarter, compared to the initial report of a 1.2% drop.

The revised figures have strengthened the case for a Bank of Japan interest-rate hike next week. The central bank's assessment is that the economy is developing broadly in line with its outlook, supporting the likelihood of a rate increase when the board sets policy on September 18.

However, household spending remains subdued due to years of rising living costs and is expected to be squeezed further as inflation picks up again through early next year. The data also showed that consumer spending, which accounts for about half of GDP, was flat, unchanged from the preliminary report.