Japan's economic growth over April-June was faster than initially estimated, the Cabinet Office said on Thursday, with upward revisions to capital expenditure and inventories, but weak demand at home and overseas is seen weighing on growth this quarter.
The Cabinet Office said the economy grew at a 0.7 percent annualized rate over April-June, an upward revision of the preliminary reading of 0.2 percent growth, in which the strong yen and weak demand were seen undermining exports and capital spending.
Japan's economy, the world's third largest, is seen lacking momentum in the current quarter as well, following a recent run of weak export, factory output and household spending data.
Unless overseas economies improve and the yen's gains fade away, the economy is at risk of faltering later this year, before Prime Minister Shinzo Abe's government fully implements the stimulus package it unveiled last month, some analysts say.
The tame economic outlook will keep the Bank of Japan under pressure to ease policy further as the central bank conducts comprehensive assessment of the effects of its stimulus program at its Sept. 20-21 rate review.