UPDATE 1-Japan Q2 GDP revised up, outlook dimmed by yen rise

(For more stories on the Japanese economy click [ID:nECONJP])

* 2Q GDP growth revised to 0.4 pct qtr/qtr vs initial 0.1 pct

* Capex improvement largely behind upward revision

* BOJ policymakers fretted over yen rise at Aug 9-10 meeting
(Adds analyst quotes, details)

By Stanley White and Rie Ishiguro

TOKYO, Sept 10 (BestGrowthStock) – Japan’s economy grew a revised 0.4
percent in April-June from the previous quarter, more than an
initial government estimate, but the strong yen and slowing
global growth give policymakers little to cheer about over the
outlook.

The government unveiled a package of measures to support the
economy on Friday but analysts doubt it could have much impact,
given Japan has little room for big spending with its public debt
twice the size of its economy. [ID:nTWKAKE615] [ID:nTOE688087]

The revised gross domestic product (GDP) translates into
annualised growth of 1.5 percent, exceeding an initial reading of
0.4 percent and matching a median market forecast, on
stronger-than-expected growth in capital spending.

The data gave little comfort to the government as it grapples
with deflation and the strong yen, which hit a fresh 15-year high
versus the dollar this week despite the Bank of Japan’s monetary
easing and threats of currency intervention by policymakers.

“The economy could hit a soft patch later this year or early
next year as the global economy slows and auto output declines
after a rush in demand for energy-efficient vehicles ends in
July-September,” said Tatsushi Shikano, senior economist at
Mitsubishi UFJ Morgan Stanley Securities.

“Even though a double-dip recession is unlikely in Japan, the
yen’s rise and stock falls will weigh on the economy, and
authorities could be prompted to conduct yen-selling intervention
and further monetary easing to cope with them.”

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A PDF presentation on the yen: http://r.reuters.com/nef47n

More stories on Japan’s economy [ID:nECONJP]

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SOFT PATCH AHEAD

Japan’s revised second-quarter growth was roughly in line
with 1.6 percent annualised growth in the United States in the
same period, while its quarter-on-quarter expansion lagged the
1.0 percent result in the 16-nation euro zone.

Capital expenditure rose 1.5 percent in April-June from the
previous quarter, more than the preliminary 0.5 percent increase
and roughly matching a median market forecast for a 1.6 percent
gain.

The BOJ eased monetary policy further at an emergency meeting
on Aug. 30, bowing to government pressure for a policy response
after the yen’s sharp rises.

BOJ policymakers had worried about the harm the strong yen
could have on exports and corporate earnings at a regular rate
review held earlier in August, although they decided to stand pat
to examine how much actual damage the market moves could have on
growth, minutes of the Aug. 9-10 meeting showed on Friday.
[ID:nTWK9KE60U]

In a sign that deflation was easing only moderately in
Japan’s slow economic recovery, wholesale prices were unchanged
in the year to August for a second straight month after a 0.4
percent gain in June, BOJ data showed on Friday. [JPCGPY=ECI]
(Additional reporting by Leika Kihara, Kaori Kaneko; Editing by
Edmund Klamann)

UPDATE 1-Japan Q2 GDP revised up, outlook dimmed by yen rise