Japan Q2 GDP annualized growth revised to 1.0 pct; still up 0.2 pct vs Q1

The government said the economy grew at a slightly faster pace on an annualized basis in the three months to June than initially thought as Japanese companies increased inventories of raw materials and semi-finished goods in preparation for usually strong year-end demand.
But the world's second-largest economy grew by just a third of the previous quarter's pace in April-June amid slower exports and weak government spending, although healthy domestic demand helped it post its sixth straight quarter of expansion.
Citing revised data, the Cabinet Office said GDP grew 0.2 pct in the second quarter of the year from the previous three months, unchanged from the preliminary estimate released last month. But annualized growth was revised up to 1.0 pct from 0.8 pct.
That pace was slower compared to the three months to March when the economy grew by 0.7 pct from the previous quarter, or at an annualized 2.7 pct.
Net exports, or gross exports minus gross imports, trimmed GDP by 0.1 percentage point in the June quarter, after being neutral in the three months to March.
Public demand also subtracted 0.2 percentage point from overall GDP, compared to 0.1 percentage point in January-March.
Overall domestic demand expanded by 0.4 pct in the June quarter, marginally faster than the 0.3 pct rise in the previous three months.
More significantly, private sector inventories were neutral to GDP growth in the June quarter, an improvement from the initial estimate of negative contribution of 0.2 percentage point.
The Cabinet Office uses only inventories of finished goods in calculating GDP for the advance estimate, but includes those of raw materials and semi-finished goods in the revised data.
Non-residential investment, which is nearly equivalent to capital spending, increased by a revised 3.7 pct from January-March, slower than the initial estimate of a 3.8 pct increase.
Private consumption grew by 0.5 pct from the March quarter, the same as the preliminary estimate.
On the bright side, GDP on a nominal basis, or before adjustments for changes in prices, grew 0.3 from the previous quarter, and expanded at an annualized rate of 1.3 pct. This was the first time since April-June 2003 that nominal growth rate has exceeded economic expansion in real terms.
And in another evidence that deflationary pressure continued to ease, the GDP deflator, which measures the degree of deflation, was down by 0.8 pct year-on-year in April-June, the smallest fall since October-December 2004 when the deflator registered a drop of 0.4 pct.
In the three months to March, the GDP deflator declined 1.2 pct from the previous year.