TOKYO: Japan's economy grew at a slower pace than initially estimated in the second quarter as the U.S.-China trade war prompted a downward revision of business spending, intensifying calls for the central bank to deepen stimulus this month.
Capital spending rose just 0.2per cent from the previous quarter, much lower than a preliminary 1.5per cent rise and the median forecast for a 0.7per cent increase. Private consumption, which accounts for some 60per cent of gross domestic product, advanced 0.6per cent from the previous three months, matching the preliminary reading.
Amid the risks to growth, BOJ Governor Haruhiko Kuroda has kept the door ajar for cutting interest rates further into negative territory, saying last week such move is among the bank's policy options. "But it's unlikely the pent-up demand in the July-September quarter will be as strong as ahead of the previous consumption tax hike in April 2014," he said.