Japan’s economy grew moderately

Japan’s gross domestic product grew by an annualized 2.9 percent in the three months to June compared to the previous quarter. The government forecast was 3.1 percent.

Although key domestic demand components such as private consumption and capital investment were revised down slightly, the data showed that consumer spending, which had fallen for four straight quarters until the end of March, rose 0.9 percent from the previous quarter, pointing to an overall recovery in the economy.

The data broadly support BOJ Governor Kazuo Ueda’s view that a gradual recovery will continue. Almost no economists expect the BOJ to change its interest rate when it meets later this month, but many BOJ observers predict a rate hike by January.