MNI DATA IMPACT: Japan Q1 Capex Up; GDP Seen Revised Higher

--Japan Q1 Non-Financial Firm Capex +4.3% Y/Y; Q4 -3.5% 

--Japan Q1 Manufacturer Capex +0.6% Y/Y Vs Q4 -9.0% 

--Japan Q1 Non-Manufacturer Capex +6.2% Y/Y Vs Q4 -0.1% 

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

companies rose 4.3% y/y in Q1, accelerating from Q4's 3.5% fall, a quarterly

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

     Following are the key points from the MOF survey:

     --Capital investment by non-financial Japanese firms rose 4.3% y/y in the

January-March period and follows a 3.5% fall in October-December, which was the

first drop in 13 quarters.

     --Capital investment plans in the current fiscal year were revised lower on

the back of the heightened uncertainty over the global economy and domestic

demand caused by the coronavirus outbreak.

     --Capex excluding soft-ware rose 3.5% y/y in Q1, reversing from a 5.0% fall

in Q4. This will be incorporate into second preliminary GDP.

     --Capex in the manufacturing sector rose 0.6% y/y in Q1 after a 9.0% fall

in Q4, while that in the non-manufacturing sector also rose 6.2% against a 0.1%

fall in Q4.

     --Capex excluding software rose 7.2% q/q in Q1, reversing from the 4.6%

fall in Q4. Combined capital outlays (including software) rose a seasonally

adjusted 6.7% in Q1 after falling 4.0% in Q4.

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

GDP revisions (due June 8). Capex in preliminary GDP, based solely on supply

side data, fell 0.5% Q/Q and pushed total domestic output down by 0.1 percentage

point.

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

to revise up its estimate of Q1 real GDP growth from the preliminary -0.9% q/q,

or an annualized -3.4%. GDP growth in the Q4 to -1.9% q/q, or an annualized

-7.3% in Q4.

     --Combined non-financial current profits plunged 32.0% y/y in Q1, following

a 4.6% fall in Q4. Current profits at manufacturers fell 29.5% y/y in Q1 vs

-15.0%, while those at non-manufacturers also fell 32.9% vs +1.1%.

--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

[TOPICS: MAJDS$,M$A$$$,M$J$$$]