By Satoshi Sugiyama

TOKYO (Reuters) – The Japanese economy likely expanded during the April-June quarter at a solid pace, as predicted by a Reuters poll, despite ongoing risks surrounding the outlook.

Analysts anticipate continued growth in Japan’s economy, bolstered by positive trends in wages and both personal and corporate spending. However, this growth faces potential risks from slowing economies in the U.S. and China.

Cabinet Office data set to be released on Monday is expected to reveal that gross domestic product (GDP) grew at an annualized rate of 3.2% in the second quarter, slightly better than the previously reported 3.1% growth.

This revision indicates a quarter-on-quarter expansion of 0.8%, unchanged from earlier estimates.

Revised GDP figures are projected to show a 1% increase in capital expenditure—an indicator of private demand—up from a 0.9% rise in the initial estimate. This reflects robust corporate investment in equipment and facilities, according to Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research & Consulting.

The preliminary data suggests that private consumption, which represents over half of Japan’s economy, increased by 1% in the second quarter, marking its first rise in five quarters.

“In the July-September period, personal consumption is expected to keep rising, driven by wage hikes and a tax cut’s effects,” reported Saisuke Sakai, senior economist at Mizuho Research and Technologies.

“Capital investment is also projected to grow, supported by sustained demand, contributing to positive annual growth of about 1%.”

Additionally, separate data from the Bank of Japan is expected on Sept. 12, which will likely indicate that in August, the corporate goods price index remained unchanged month-on-month, reflecting stable pricing in the goods sector.