Japan's Q3 GDP seen revised up on higher capex

Japan’s economy was expected to expand slightly faster in the third quarter than first estimated, a Reuters poll found.

Strong capital spending and showing robust exports and business investment supported the economy, according to the poll.

The world’s third-largest economy was expected to post revised annualised growth of 1.5 per cent in July-September, up from the initial estimate of 1.4 per cent, the poll of 16 economists showed.

This would translate into a quarter-on-quarter rise of 0.4 per cent from the estimate of 0.3 per cent, reports Reuters.

Economists revised up their forecasts for the third quarter GDP after data by the finance ministry showed Japanese companies raised capital spending in July-September.

The poll found that capital expenditure, a key component of gross domestic product, was expected to rise 0.4 per cent over the quarter, stronger than the 0.2 per cent increase shown in the preliminary data.

The government is set to compile an extra budget worth 2.7-2.9 trillion yen ($24-26 billion) for the fiscal year to March 2018, to boost childcare support, raise productivity at small and medium-sized companies, and to strengthen the farm sector’s competitiveness, government sources told Reuters.

Prime Minister Shinzo Abe’s top economic advisory panel wants the coming year’s budget to reflect a combination of monetary easing and “growth-oriented” fiscal policy.