MNI DATA IMPACT: Japan Q1 Capex Up But GDP Seen Revised Lower

--Japan Q1 Non-Financial Firm Capex +6.1% Y/Y; Q4 +5.7% 

--Japan Q1 Capex (Ex-Software) +6.9% Y/Y; Q4 +5.5% 

--Japan Q1 Capex (Ex-Software) S/A +1.1% Q/Q; Q4 +3.3% 

--Japan Q1 Manufacturer Capex +8.5% Y/Y Vs Q4 +10.9% 

--Japan Q1 Non-Manufacturer Capex +5.0% Y/Y Vs Q4 +2.7% 

--Japan Q1 Non-Financial Current Profit +10.3% Y/Y Q4 -7.0%

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

companies rose 6.1% on year in the January-March quarter, after rising 5.7% in

October-December, a quarterly survey of capital investment and corporate profits

by major companies released by the Ministry of Finance showed Monday.

     But combined capital outlays (excluding software) rose a seasonally

adjusted 1.1% in Q1, slowing from +3.3% in Q4, indicating a likely downward

revision to Q1 GDP data.

     Following are the key points from the Ministry of Finance quarterly

Financial Statements Statistics of Corporations by Industry survey:

     --Capital investment by non-financial Japanese firms rose 6.1% on year in

the January-March period, a 10th straight q/q rise. The pace of increase

accelerated from 5.7% in October-December.

     --Capital investment plans in the current fiscal year remained solid but

some companies are considering postponing the implementation of capex amid the

lingering uncertainties over global demand caused by the trade dispute.

     --Bank of Japan economists are focused on revised capital investment plans

in the June Tankan business sentiment survey due out on July 1.

     --Capex in the manufacturing sector rose 8.5% on year in Q1 vs +10.9% in

Q4, while that in the non-manufacturing sector gained 5.0% vs. +2.7%.

     --Capex excluding software gained 6.9% on year in Q1, accelerating from

+5.5% in Q4. Combined capital outlays (excluding software) rose a seasonally

adjusted 1.1% in Q1, marking the second straight rise after rising 3.3% in Q4.

     --The MOF survey, based on the demand side, is the key to calculating Q1

GDP revisions (due out on June 10). Capex in preliminary GDP, based solely on

supply side data, fell 0.3% on quarter and pushed total domestic output 'down'

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 Q1 real GDP growth from a preliminary +0.5% on

quarter, or an annualized +2.1%. GDP growth in the first quarter followed +0.4%

on quarter, or an annualized +1.6% in Q4.

     --Combined non-financial current profits rose 10.3% on year in Q1,

following a 7.0% fall in Q4. Current profits at manufacturers fell 6.3% on year

in Q1 vs -10.6% in Q4, while those at non-manufacturers rose 18.4% vs. -4.9% in

Q4.

--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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