MNI DATA IMPACT: Japan Q2 Capex Down; GDP Seen Revised Lower

--Japan Q2 Non-Financial Firm Capex +1.9% Y/Y; Q1 +6.1% 

--Japan Q2 Capex (Ex-Software) -1.7% Y/Y; Q1 +6.9% 

--Japan Q2 Capex S/A +1.5% Q/Q; Q1 +0.8% 

--Japan Q2 Manufacturer Capex -6.9% Y/Y Vs Q1 +8.5% 

--Japan Q2 Non-Manufacturer Capex +7.0% Y/Y Vs Q1 +5.0% 

--Japan Q2 Non-Financial Current Profit -12.0% Y/Y Q1 +10.3%

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

companies rose 1.9% on year in the April-June quarter, after rising 6.1% in

January-March, a quarterly survey of major companies released by the Ministry of

Finance showed Monday.

     Combined capital outlays (including software) rose a seasonally adjusted

1.5% in Q2, accelerating from +0.8% in Q1.

     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 1.9% on year in

the April-June period, the 11th straight rise. The pace of increase decelerated

from +6.1% in January-March.

     --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 ongoing trade disputes.

     --Capex in the manufacturing sector fell 6.9% on year in Q2 for the first

drop since April-June 2017, vs +8.5% in Q1, while that in the non-manufacturing

sector gained 7.0% vs. +5.0%.

     --Capex excluding software fell 1.7% on year in Q2, decelerating from +6.9%

in Q1. Combined capital outlays (including software) rose a seasonally adjusted

1.5% in Q2, marking the third straight rise after rising 0.8% in Q1.

     --The MOF survey, based on the demand side, is the key to calculating Q2

GDP revisions (due out on Sept. 9). Capex in preliminary GDP, based solely on

supply side data, rose 1.5% on quarter and pushed total domestic output up by

0.2 percentage point.

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

to revise down its estimate of Q2 real GDP growth from a preliminary +0.4% on

quarter, or an annualized +1.8%. GDP growth in the second quarter followed +0.7%

on quarter, or an annualized +2.8% in Q1.

     --Combined non-financial current profits fell 12.0% on year in Q2,

following a 10.3% rise in Q1. Current profits at manufacturers fell 27.9% on

year in Q2 vs -6.3% in Q1, while those at non-manufacturers fell 1.5% vs. +18.4%

in Q1.

--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: M$A$$$,M$J$$$]