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JAPAN DATA: Q3 Capex Stronger Than Forecast But Profits Sink

JAPAN DATA
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Japan Q3 capex and company profit prints were mixed. We had capex on the firmer side. We rose 8.1%y/y, against a 6.7% forecast and prior 7.4% outcome. Ex software we were up 9.5%y/y, against a 8.2% forecast. In q/q terms ex software posted a solid 0.8% rise. 

  • The chart below plots this ex software capex measure in q/q terms against business investment as per the national accounts, which fell 0.2%q/q in Q3. So today's data suggests we may have positive revisions.
  • The sequential against in terms of y/y outcomes for capex also suggested positive momentum in the space, which should aid broader economic activity.
  • Other data was softer though. Company sales were 2.6% in y/y terms, versus 3.2% forecast and 3.5% prior. Profits fell -3.3%y/y, well below the 9.3% forecast and 13.2% prior.
  • This is the weakest profit print since last 2020. 

Fig 1: Japan Capex Stronger Than Expected, May Aid GDP Revisions 

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Japan Q3 capex and company profit prints were mixed. We had capex on the firmer side. We rose 8.1%y/y, against a 6.7% forecast and prior 7.4% outcome. Ex software we were up 9.5%y/y, against a 8.2% forecast. In q/q terms ex software posted a solid 0.8% rise. 

  • The chart below plots this ex software capex measure in q/q terms against business investment as per the national accounts, which fell 0.2%q/q in Q3. So today's data suggests we may have positive revisions.
  • The sequential against in terms of y/y outcomes for capex also suggested positive momentum in the space, which should aid broader economic activity.
  • Other data was softer though. Company sales were 2.6% in y/y terms, versus 3.2% forecast and 3.5% prior. Profits fell -3.3%y/y, well below the 9.3% forecast and 13.2% prior.
  • This is the weakest profit print since last 2020. 

Fig 1: Japan Capex Stronger Than Expected, May Aid GDP Revisions 

Keep reading...Show less