Japan: Slight revisions to our growth forecasts for 2H 2010 and onwards

- Slight revisions to our growth forecasts for 2H 2010 and onwards
• Reflecting the recent weaker-than-expected job market data, we have slightly downgraded our forecast for private consumption • In the meantime, we have revised up our capex forecast as we anticipate corporate income growing at a somewhat faster pace
• We have downgraded our GDP deflator forecast as a delayed recovery in wages is likely to weigh on consumer prices
• Our annual real GDP growth rate forecasts are unchanged at 2.9% and 1.0% respectively for CY2010 and CY2011
- Improvement in consumer sentiment slows down
• Consumer sentiment index rose for the sixth consecutive month by 0.7pts mom to 43.5 in June; improvement pace has slowed down
• Consumer perception of “the value of property (asset) growth” also worsened
for the second consecutive month
• Industrial production was revised up 0.2pts to +0.1% mom in May. Manufacturing sector capital utilization also rose 0.8% mom to 72.5%
- Demand for funds remains weak
• The year-on-year growth in M2 in June slowed down for the first time in three months.
• The year-on-year decline in the balance of bank loans by city banks expanded further in June.
CreditSuisse Japan Economics Weekly 20100715

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