MNI DATA IMPACT: Japan Q1 GDP Revised Up On Stronger Capex

--Japan Q1 GDP Rev -0.6% Q/Q; Prelim -0.9%; MNI Median -0.5% 

--Japan Q1 Annualized GDP Rev -2.2% Vs -3.4%; MNI Median -2.1% 

--Japan Q1 Net Export Contribution Unrevised -0.2 Pct Point

     TOKYO (MNI) - Japan's economy contracted at a slower pace than initially

estimated in Q1, with business investment stronger than first reported, revised

data released by the Cabinet Office Monday showed.

     The economy contracted 0.6% q/q, or an annualized -2.2%, weighed by weaker

private consumption and public investment, despite the better than first

reported capex spending.

     The main points of note include:

     --Real Q1 GDP was revised up from the preliminary estimate of -0.9% on

quarter and an annualized -3.4%, underperforming expectations for an improvement

on the flash reading.

     --The upward revision came mainly from higher capital investment, revised

up to a 1.9% rise from a preliminary reading of a 0.5% fall. There was a 4.8%

fall in Q4.

     --The contribution to overall GDP from capital investment was revised up to

+0.3 percentage point from -0.1 pp initially.

     --Private consumption, which accounts for about 60% of Japan's GDP, was

revised to -0.8% (prelim -0.7%) q/q. It pushed overall GDP lower by an unrevised

rounded -0.4 pp.

     --The contribution of net exports -- exports minus imports -- was unrevised

at -0.2 percentage point.

     --The contribution of private-sector inventories to total domestic output

was revised to -0.1 percentage point from -0.0 percentage point, while the GDP

contribution of public investment was unrevised at -0.0 pp.

     --Japan's economy in Q2 is expected to contract more than Q1, weighed by

the drop in weak exports and production as well as private consumption as the

coronavirus impact hits, as Bank of Japan economists expecting exports,

production and private consumption, to remain weak.

     --The BOJ still holds to the baseline scenario based on the view by the

International Monetary Fund that Japan's economy is expected to gradually

improve in the second half of this year.

     The average economist forecast for Q2 GDP growth is annualized at -21.33%,

according to the latest monthly ESP Survey of 33 economists by the Japan Center

for Economic Research conducted from April 27 to May 11.

--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$$$,M$J$$$]