MNI BRIEF: Japan Q2 Capex Up Q/Q; GDP Seen Revised Higher
MNI (TOKYO) - Combined capital investment by non-financial Japanese companies excluding software rose 1.9% q/q in the second quarter of 2024, reversing from Q1's 0.3% decline, a quarterly revised survey released by the Ministry of Finance Monday showed.
The MOF survey, based on the demand side, is the key to calculating Q2 GDP revisions (due Sept. 9) and indicated that capex will be revised up from the preliminary estimate of 0.9%, based solely on supply side data.
Based on the MOF data on capex and inventories, the government is likely to revise up its estimate of Q2 real GDP from the preliminary 0.8% q/q, or an annualised 3.1% unless other components are revised down sharply.
Combined capital investment by non-financial companies including software rose 1.2% q/q in Q2 after falling 3.9% in Q1. Capital investment including software rose 7.4% y/y in the second quarter, accelerating from 6.8% in Q1.
The expected upward revision of capital investment will ease Bank of Japan’s concern over sluggish capex vs. strong capex plans in the BOJ Tankan.