

Group 1 - The Japanese government has revised its GDP growth forecast for the fiscal year 2025 from 1.2% to 0.7%, although this remains above the private sector's prediction of 0.5% [1] - The Bank of Japan's continuous interest rate hikes since the end of 2024 and a temporary strengthening of the yen have alleviated imported inflation pressures, but the yen's recent depreciation and delayed expectations for Federal Reserve rate cuts have led to a mild resurgence in inflation [3] - Japan's inflation pressure eased in June due to the restoration of gasoline subsidies, indicating a potential slowdown in inflation [3] Group 2 - Mechanical orders, a leading indicator of corporate equipment investment in Japan, show that while non-manufacturing investment growth has cooled, manufacturing mechanical orders remain at historically high levels [3] - The leading indicator for construction investment, specifically the non-residential building area, has recently increased, and the Sentix investor confidence index has rebounded significantly since April, reflecting improved corporate confidence in medium to long-term investments [3] - Overall, corporate investment in the second quarter has weakened due to tariff impacts, but inflation is expected to slow in the second half of the year, although it is anticipated to remain sticky [3]