The Japanese second quarter GDP growth data is set to release tomorrow. According to a DBS Bank research report, the headline growth is likely to have slowed down to 0.6 percent on a quarter-on-quarter basis from 2.2 percent in the first quarter, but still consistent with the long-term trend.
Exports slowed down further in the second quarter, in the context of the deterioration in global demand and the escalation in China-US trade war. However, domestic demand continued to have steady growth last quarter, owing to the tight labor market conditions.
“We maintain the full-year 2019 GDP growth forecast at 0.7 percent, but see bigger challenges in 2H, taking into account the upcoming consumption tax hike and the rise in Japan-Korea trade tensions”, added DBS Bank.
