Japan's Revised Q2 GDP Growth Rate Beats Expectations

Japan's economy grew faster than initially estimated in the April-June quarter, with revised data showing an annualised 1.4% expansion compared to the initial estimate of 1.1%. This upward revision reflects capital spending data that showed Japanese firms increased spending on plant and equipment by 1.6% in the second quarter from a year earlier.

The economy's growth was supported by external demand, or exports minus imports, which added 0.5 percentage points to GDP growth, unchanged from the preliminary data. However, domestic demand knocked off 0.1 percentage point, better than a 0.2% drag in the initial estimate.

Private consumption, which accounts for more than half of Japan's economy, was flat, matching the initial data. Businesses' capital expenditure fell 0.9% in the second quarter, revised up from the initial estimate for a 1.2% drop and compared with economists' forecast for a 0.8% fall.

The Bank of Japan (BOJ) is set to make its decision on interest rates next week, with markets widely expecting a rate hike. Investors are keen to assess the impact of the Middle East conflict and past rate hikes on Japan's economy.