TOKYO (Reuters) - Japan’s economy was expected to grow faster than initially estimated in the first quarter as capital spending fell less than expected, a Reuters poll found, but even a GDP revision is unlikely to change the impression of a lethargic economy.
The economy is expected to have expanded an annualised 1.9 percent in January-March, the poll of 23 analysts showed, after 1.7 percent growth shown in the preliminary data.
That would be 0.5 percent growth from the previous quarter, revised up from 0.4 percent initially announced, the poll showed.
“An appreciation of the yen could rein in manufacturers’ capital spending going forward,” said Koya Miyamae, senior economist at SMBC Nikko Securities.
“If the rate of economic growth is revised up - led by capital spending - it would be taken as a positive factor. But we cannot expect capital spending will lead economic growth.”
The poll found that capital expenditure, a major component of gross domestic product, was thought likely to fall 0.3 percent over the quarter - substantially more robust than the 1.4 percent decline seen in the preliminary reading.
The Cabinet Office will publish the revised first quarter GDP data at 8:50 a.m on June 8 (2350 GMT June 7).
The poll found core machinery orders, regarded as a useful though volatile leading indicator of capital spending in the coming six to nine months, fell 3.8 percent in April from the previous month.
From a year earlier, core orders, which exclude orders for ships and electrical equipment, were seen to have declined 2.3 percent in April after a 3.2 percent gain in March.
“There is still uncertainty over the outlook for capex due to factors such as the yen’s relatively firm trend, a slowdown in emerging economies, and sluggish domestic demand,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“On the other hand, the environment for capex, such as demand for renewing or upgrading old facilities, demand ahead of the Tokyo Olympics and lower interest rates, has not worsened.”
The Cabinet Office will release machinery orders at 8:50 a.m. on June 9.
The current account balance, which will be announced at the same time as GDP, was seen likely to show a surplus of 2.32 trillion yen ($21.34 billion) in April, the poll showed.
It would be the 22nd straight month of surplus helped by a positive trade balance and income from overseas investments.
The poll showed the corporate goods price index (CGPI), which measures the price companies charge each other for goods and services, was expected to show an annual decline of about 4.2 percent in May.
Prime Minister Shinzo Abe announced on Wednesday, as widely expected, he would delay a planned sales tax hike by two-and-a-half years to forestall risks from external factors - notably slowing Chinese growth.
Reporting by Kaori Kaneko; Editing by Eric Meijer
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