Japanese Economy Monthly Forecast (June 2019)

▶ Despite the small upward revision in Q1real GDP official estimates, there are reasons for concern as the  demand-side GDP components all declined QoQ. Growth was mainly driven by the expansion in private inventory changes and shrinking imports.

▶ Contrary to our expectations of an economic recoil following the long holidays, May data showed a robust increase in production. However, this might be temporary.

▶ Regarding Q2, we forecast a real annualized GDP growth of +0.2% (expenditure side). The production-side forecast is an annualized +0.6%. The forecasts from the past month suggest a growth deceleration trend.