As more data has become available, it has been apparent that the Japanese economy did much better in Q1 2015 than originally believed. The original reading of the Q1 growth figure for the nation came in at 0.6% and this has now been revised upwards to 1% which works out as an annualised growth rate of 3.9%. The annual forecast for growth was 2.7% and the initial reading of growth suggested that this would be missed with growth of 2.4%, based on the preliminary data.
The upwards revision has been attributed to increased level of business spending which was originally estimated at just 0.4%, well below the anticipated level of 2.3%. In the event, the revised data puts business spending up by 2.7% on the previous quarter.
The revised quarterly data puts Q1 2015 as the best quarterly performance that Japan has seen in two years. It emphatically draws a line under the “technical recession” (is there any other kind?) that the nation saw last year which analysts attributed to the effects of raising the sales tax last April.
On a more pessimistic note, Japan’s balance of trade was worse than anticipated, coming in at 1.3 trillion Yen, 0.4 trillion Yen below the predicted value. On the other hand, the balance of trade figure marks the tenth straight month of trade surplus. It was markedly down on May’s figure of 2.8 trillion Yen which marked a seven year high. The faltering trade surplus figures have led some people to believe that Japan’s Q2 figures will be weaker than Q1. Should that prove to be the case, it is likely to increase the chances of further monetary easing by the Bank of Japan in the early autumn.