MNI 5 THINGS: Japan Q3 Capex Up, Q3 GDP Seen Revised Lower

--Japan Q3 Non-Financial Firm Capex +4.5% Y/Y; Q2 +12.8% 

--Japan Q3 Capex (Ex-Software) +2.5% Y/Y; Q2 +14.0% 

--Japan Q3 Capex (Ex-Software) S/A -4.0% Q/Q; Q2 +6.1% 

--Japan Q3 Manufacturer Capex +5.1% Y/Y Vs Q2 +19.8% 

--Japan Q3 Non-Manufacturer Capex +4.2% Y/Y Vs Q2 +9.2% 

--Japan Q3 Non-Financial Current Profit +2.2% Y/Y Q2 +17.9%

     TOKYO (MNI) - Combined capital investment by non-financial Japanese

companies rose 4.5% on year in the July-September quarter, after rising 12.8% in

April-June, the results of a quarterly survey of capital investment and

corporate profits by major companies released by the Ministry of Finance Monday

showed.

     The results are likely to lead the government revising down its estimate of

Q3 GDP in data due on Thursday, Dec. 20.

     The key points from the Ministry of Finance quarterly survey called the

Financial Statements Statistics of Corporations by Industry:

     - Capital investment by non-financial Japanese firms rose 4.5% on year in

the July-September period, posting the eighth straight q/q rise, but the pace of

increase decelerated sharply from 12.8% in April-June.

     - Investment in equipment remained solid on the back of the continued labor

shortages in Japan, with the impact of the U.S.-China trade dispute on Japan's

economy limited. But some firms were cautious about implementing capex amid

uncertainties over global demand.

     - Capex in the manufacturing sector rose 5.1% on year in Q3 vs +19.8% in

Q2, while that in the non-manufacturing sector gained 4.2% vs. +9.2%.

     - Capex excluding software gained 2.5% on year in Q3, also decelerating

from 14.0% in Q2. Combined capital outlays (excluding software) fell a

seasonally adjusted 4.0% in Q3, marking the first q/q drop in five quarters

after rising a revised 6.1% in Q2.

     - The MOF survey based on the demand side is the key to calculating

revisions to Q3 GDP due out on Dec. 20. Capex in preliminary GDP, based solely

on supply side data, fell 0.2% on quarter and pushed total domestic output

modestly lower (although by a rounded 0.0 percentage point).

     - Based on the MOF data on capex and inventories, the government is likely

to revise down its estimate of Q3 real GDP growth from a preliminary -0.3% on

quarter, or an annualized -1.2%. The contraction in the third quarter followed a

growth of 0.8% on quarter, or an annualized +3.0% in the second quarter.

     - Combined non-financial current profits rose 2.2% on year in Q3,

decelerating from a 17.9% gain in Q2. Current profits at manufacturers fell 1.6%

on year in Q3 vs. +27.5% in Q2 while those at non-manufacturers rose 4.6% vs.

+12.4% in Q2.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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