MNI BRIEF: Japan Q4 Capex Rise Slows, GDP Seen Revised Lower
MNI (TOKYO) - Combined capital investment by non-financial Japanese companies excluding software rose 0.5% q/q in Q4, slowing from 1.1% in Q3, a quarterly revised survey released by the Ministry of Finance Tuesday showed.
The MOF survey, based on the demand side, is the key to calculating Q4 GDP revisions due March 11 and indicated that capex will be revised lower from the preliminary 0.5% estimate, based solely on supply side data.
Based on the MOF data on capex and inventories, the government is likely to revise its estimate of Q4 real GDP lower from the preliminary 0.7% q/q, or an annualised 2.8% unless other components are revised sharply.
Combined capex by non-financial companies including software rose 0.6% q/q in Q4 after rising 2.0% in Q3, while capex including software fell 0.2% y/y, slowing from 8.1% in Q3.
Capital investment including soft-ware fell 0.2% y/y in the fourth quarter, slowing from +8.1% in Q3 and for the first drop in 15 quarters.
Weaker capital investment may strengthen Bank of Japan’s concern over sluggish capex amid high uncertainties over the U.S. economic policies and their impact on the global economy, although the BOJ Tankan survey showed strong capex plans.
The BOJ will release the results of March Tankan survey on April 1.