Kyodo News reports that Japan's gross domestic product (GDP) in the second quarter of 206 expanded 1.4% on an annualized basis, up from the preliminary estimate of 1.1%. Meanwhile, wages in July rose 4.7%, the highest since 1997, or in nearly 30 years, bolstering expectations that the Bank of Japan (BOJ) will raise interest rates at its meeting next week. The upward revision to GDP was due to business investment contracting less than initially assessed, with real GDP growing 0.4% from the previous quarter, higher than the initial estimate of 0.3%. Government investment was revised down to a contraction of 0.5%, while private consumption rose slightly by 0.01%. Nominal GDP expanded 5.5% on an annualized basis. Analysts at Nomura Securities said there are no signs hindering a rate hike in September, and the continued wage increases for the sixth consecutive month reflect a tight labor market, supporting the likelihood of a BOJ rate hike.
Strong GDP and wage growth support BOJ rate hike, pushing yields up.
