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"Overall it looks like the economy is stagnating. Consumer spending is weak, and the reason is low wage gains. There is a lot of uncertainty about overseas economies, and this is holding back capital expenditure".
-Norio Miyagawa, Mizuho Securities
Japanese economic growth slowed down in April-June period after a notable growth during the previous quarter mainly due to the weak exports and capital expenditure, adding even more pressure on premier Shinzo Abe to add some more policies that can produce more sustainable growth. On an annualized basis, GDP advanced 0.2%, slowing dramatically from the 1.9% jump in the first three months of the year. Meanwhile, many economists had expected an annualized increase of 0.7% and a quarterly rise of 0.2%. The economy, in turn, rose 0.5% rate in the January-March quarter. Moreover, consumer demand, which constitute for nearly two-thirds of business activity, added only 0.2%. In order to fight the stagnation if Japanese economy, Prime Minister Shinzo Abe recently proposed ¥28 trillion ($267 billion) in spending initiatives meant to push consumers and businesses to spend more money and support the stalling recovery.
In the meantime, Asian shares dropped from a one-year high as disappointing economic data in Japan and the US curbed demand for riskier assets, even as oil extended its rebound. Although, the yen continue to strengthen its positions as gold and government debt advanced.