MNI DATA IMPACT: Japan Q2 GDP Revised Lower on Capex

--Japan Q2 GDP Rev +0.3% Q/Q; Prelim +0.4%; MNI Median +0.3% 

--Japan Q2 Annualized GDP Rev +1.3% Vs +1.8%; MNI Median +1.3% 

--Japan Q2 Capex Rev +0.2% Q/Q; Prelim +1.5%; Median +0.8% 

--Japan Q2 Capex Contribution Revised At +0.0 Point Vs. +0.2 pt 

--Japan Q2 Consumption Unrevised at +0.6% Q/Q 

--Japan Q2 Consumption Contribution Unrevised +0.3 Point 

--Japan Q2 Net Export Contribution Unrevised -0.3 Pct Point

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

estimated in the April-June quarter, with business investment weaker than first

estimated, revised (second preliminary) data released by the Cabinet Office

Monday showed.

     The economy rose 0.3% on quarter, or an annualized 1.3%, in Q2, thanks to

strong private consumption and public investment.

     --Real Q2 GDP was revised down from the preliminary estimate of +0.4% and

1.8% respectively, in line with the MNI median forecast.

     --The downward revision came mainly from lower capital investment, revised

down to a 0.2% gain (the MNI median forecast was +0.8%) from a preliminary

+1.5%. There was a 0.2% fall in Q1.

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

to +0.0 percentage point from a rounded +0.2pp initially.

     --Private consumption, which accounts for about 60% of GDP, was unrevised

at 0.6% on quarter. It pushed overall GDP higher by an unrevised rounded +0.3

pp.

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

unrevised at -0.3 percentage point. 

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

revised to -0.0 percentage point from -0.1 percentage point and the GDP

contribution of public investment was revised to 0.1 percentage point from 0.0

percentage point.

     --Japan's economy is expected to remain solid for the third quarter, thanks

to the front-loaded rise in demand before the consumption tax hike, although

exports are likely to remain weak amid the slowdown in overseas economies.

     --Bank of Japan economists expect capital investment needed to deal with

the labor shortage to remain solid among non-manufacturers, but they are worried

that the heightened uncertainties over the global economy will prompt firms to

put off implementation plans.

     --The average economist forecast for Q3 GDP growth is annualized at 1.30%,

according to the latest monthly ESP Survey of 37 economists by the Japan Center

for Economic Research conducted from July 25 to August 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$$$,M$J$$$]