Japan's economy likely swung back to growth in the October-December period, helped by a slight pickup in external demand, though analysts warned private consumption remains fragile, a Reuters poll showed on Friday. The expected return to expansion, albeit modest, would come at a time when the Bank of Japan is debating the likelihood of a near-term exit from its massive stimulus programme, and is closely monitoring upcoming wage talks and consumer spending. "The recovery is not strong enough to regain from the 0.7% decline (annualised -2.9%) in July-September," said Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research and Consulting.
TOKYO (Reuters) -Japan's economy grew less than initially estimated in the second quarter and wages slumped in July, casting doubt over central bank projections that solid domestic demand will keep the country on course for a recovery. Capital expenditure and private consumption both fell in the April-June period, revised gross domestic product (GDP) data showed on Friday, underscoring the fragile state of Japan's economy, which is already facing headwinds from weakening Chinese and U.S. growth. Real wages adjusted for inflation fell in July for a 16th straight month in a sign households continued to feel the pinch from rising prices, separate data showed, boding ill for consumption.
Policymakers in Tokyo believe China's deepening economic woes could hit Japan's fragile recovery, especially if Beijing fails to shore up demand with meaningful stimulus, potentially delaying an exit from ultra-loose monetary policy. China's downturn would leave Japan's export-reliant economy with little external support as aggressive Federal Reserve interest rate hikes cool growth in the United States, another key driver of global activity. The risks from China will be among key topics of debate at the Bank of Japan's September policy meeting, say five sources familiar with the bank's thinking, and raise fresh questions about Governor Kazuo Ueda's efforts to wean the economy off the massive monetary stimulus of the past decade.
TOKYO (Reuters) -Japan's exports fell in July for the first time in nearly 2-1/2 years, dragged down by faltering demand for light oil and chip-making equipment, underlining concerns about a global recession as key markets like China weakened. Ministry of Finance (MOF) data out Thursday showed Japanese exports fell 0.3% in July year-on-year, compared with a 0.8% decrease expected by economists in a Reuters poll. It followed a 1.5% rise in the previous month.