MNI BRIEF: Japan Q3 Capex Up Q/Q; GDP Revised Lower
MNI (TOKYO) - Third quarter Combined capital investment by non-financial Japanese companies excluding software rose 0.8% q/q, slowing from 1.5% growht in Q2, a quarterly revised survey released by the Ministry of Finance Monday showed.
The demand-side survey is used to calculate Q3 GDP revisions due Dec 9 and indicated that capex will be revised lower from the preliminary -0.2%.
Based on the MOF data on capex and inventories, the government is likely to revise lower from its estimate of Q3 real GDP from the preliminary 0.2% q/q, or an annualised 0.9%, unless other components are revised upward.
Combined capital investment by non-financial companies including software rose 1.7% q/q in Q3 after rising 0.8% in Q2. Capital investment including software rose 8.1% y/y in the third quarter, accelerating from 7.4% in Q2.
The expected downward revision may strengthen Bank of Japan’s concern over capex in the BOJ Tankan.
Bank officials are focused on how corporate profits at manufacturers evolve in or after the fourth quarter from their drop in the third quarter (-15.1%) as they see corporate profits a key for firms to raise wages next year. (See MNI POLICY:Equities, Politics To Weigh On BOJ Dec Decision)