Upbeat Japan's June tertiary activity figures support modest growth in Q2

Japan's tertiary activity figures for the month of June rebounds more than expected, bolstering our view that GDP posted modest positive growth in Q2 for the second successive quarter.

Data released by Japan's Ministry of Economy, Trade and Industry (METI) showed that Japan's tertiary activity index in June rose a seasonally adjusted 0.8 percent from May, when it dropped by 1.2 percent, beating economists' expectations for a 0.3 percent gain. On a yearly basis, the tertiary activity index rose 0.4 percent in June, following a 0.3 percent increase in the preceding month.

June’s tertiary activity figures were boosted by an increase in living and amusement-related services as well as medical care and wholesale trade output. The improvement in June followed a steeper-than-expected decline in May (revised to -1.2 percent m/m). However, this still left tertiary activity (which accounts for more than two-thirds of overall output) up 0.2 percent  Q/Q in Q2.