Japan's economic growth slows

The Japanese economy slowed in the second quarter and looks likely to slow further in the third quarter.

The Cabinet Office reported on Monday that Japan's economy grew by 0.6 percent in the second quarter of 2013. It was the third consecutive quarter of growth, although the growth rate was down from 0.9 percent in the first quarter.

Second quarter growth was driven by consumer spending, which grew 0.8 percent, and government spending, which grew 1.0 percent. Net exports contributed 0.2 percentage points to growth, its second consecutive quarter of positive contribution.

The second quarter appears to have ended on a weak note though. A report from the Cabinet Office last week showed that the index of coincident economic indicators fell 0.8 point in June, the first decline in seven months.

And pointing to further weakness ahead, the index of leading economic indicators fell an even larger 3.7 points.

Economic indicators for July released last week also point to weakness at the start of the third quarter.

The Cabinet Office's economy watchers survey showed that the current conditions index of service sector sentiment fell to 52.3 in July from 53.0 in June. The future conditions index was unchanged at 53.6.

The Cabinet Office's consumer confidence index fell to 43.6 in July from 44.3 in June, its second consecutive decline.

Markit's composite output index fell to 50.7 in July from 52.3 in June. The manufacturing purchasing managers index fell to 50.7 from 52.3 while the business activity index for the service sector fell to 50.6 from 52.1.