Revised Q2 GDP Data Boosts Case for BOJ Rate Hike

Japan's economy grew faster than initially estimated in the second quarter, according to revised data from the Cabinet Office. The gross domestic product expanded 1.4% from the previous quarter on an annualized basis, up from an earlier estimate of 1.1%. This upward revision was driven by business fixed investment, which fell 0.9% from the previous quarter compared with an initially reported 1.2% decline.

The revised GDP figures support the Bank of Japan's assessment that the economy is developing broadly in line with its outlook, strengthening the case for a widely expected interest-rate hike next week. Swap contracts heavily point to a move at the upcoming policy meeting on September 18.

Consumer spending, which accounts for about half of GDP, was flat and unchanged from the preliminary report. Household spending has been squeezed by years of rising living costs, and inflation is expected to pick up again through early next year.