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Japan Q2 GDP growth revised lower on weaker capital spending

The Japanese economy grew slower than initially projected in the second quarter as a re-escalation in global trade tensions pushed manufacturers to cut back on spending.

The country's second-quarter GDP growth was revised down to 0.3% from an initial reading of 0.4%, data from the Cabinet Office showed. Japan's GDP expanded 0.5% in the three months to March.

Capital expenditure growth came in at 0.2%, sharply lower than the 1.5% expansion in the initial forecast.

"The downward revision of business investment is primarily due to slower capital expenditure by manufacturers, who cut back on spending in [the second quarter] amidst a re-escalation in U.S.-China trade frictions," wrote Stefan Angrick, senior economist at Oxford Economics.

"While investment by non-manufacturers, particularly software-related, maintained robust growth, it was not enough to completely offset the contraction in spending by manufacturers."

Private demand grew 0.4%, compared with the initial estimate of 0.7%.

On a seasonally adjusted annualized basis, the Japanese economy grew 1.3% in the second quarter, slower than the initial forecast of 1.8% and weaker than the 2.2% rate of expansion in the first quarter.