Tokyo
Skytree
and
Mount
Fuji
are
seen
from
the
I-link
Town
observatory
in
Ichikawa
city,
Chiba
prefecture,
east
of
Tokyo
on
July
2,
2023.
Philip
Fong
|
Afp
|
Getty
Images
Japan’s
economy
posted
its
third
straight
quarterly
expansion,
provisional
government
data
showed
Tuesday,
as
robust
export
growth
contributed
to
an
annualized
6%
expansion
in
the
second
quarter,
handily
beating
market
expectations.
Economist
surveyed
by
Reuters
had
expected
the
world’s
third-largest
economy
to
post
3.1%
growth
in
the
April-June
quarter.
The
impressive
gross
domestic
product
data
translated
to
a
more
modest
quarterly
expansion
of
1.5%,
topping
expectations
for
0.8%
growth.
The
benchmark Nikkei
225 index
extended
gains
slightly
to
trade
up
nearly
1%,
while
the Japanese
yen pared
losses
against
the
U.S.
dollar
and
Japanese
government
bonds
across
the
various
tenures
were
broadly
unchanged.
Tuesday’s
GDP
print
pointed
to
a
continued
post-Covid
recovery
for
Japan’s
economy.
Still,
this
narrower
gap
between
reality
and
expectation
in
quarterly
growth
tempers
any
longer-term
optimism.
“Japan’s
economy
expanded
at
an
extremely
rapid
pace
last
quarter,
but
we
expect
a
renewed
slowdown
across
the
second
half
of
the
year,”
Marcel
Thieliant,
head
of
Asia-Pacific
at
Capital
Economics,
wrote
in
a
note.
“However,
the
details
of
the
report
weren’t
as
impressive
as
the
headline,”
he
added.
“Instead,
nearly
all
of
the
increase
in
output
was
driven
by
a
1.8%-pts
boost
from
net
trade.
That
marked
the
second-largest
contribution
from
net
trade
in
the
28-year
history
of
the
current
GDP
series,
with
only
the
bounce
back
in
exports
from
the
first
lockdown
at
the
beginning
of
the
pandemic
providing
a
larger
boost.”
Exports
rebounded
3.2%
from
the
previous
quarter
—
largely
driven
by
the
spike
in
car
shipments
—
while
imports
plunged
4.3%
over
the
time
period.
Other
details
beyond
the
rosy
headline
GDP
growth
figure
suggest
the
Bank
of
Japan
is
likely
to
revert
from
its
ultra-easy
monetary
posture.
A
surprise
0.5%
annualized
drop
in
private
consumption
expenditure,
along
with
muted
capital
expenditure
pointing
to
muted
domestic
demand
despite
the
first
employee
compensation
sequential
increase
in
seven
quarters.
This
comes
as
inflation
has
exceeded
the
BOJ’s
2%
target
for
15
consecutive
months.
In
July,
the
Japanese
central
bank
loosened
its
yield
curve
control
over
the
10-year
Japanese
government
bond
in
a
modification
it
says
was
intended
to
make
its
ultra-easy
monetary
position
more
sustainable.
