MNI DATA IMPACT: Japan Q3 Capex Down; GDP Seen Revised Higher

--Japan Q3 Non-Financial Firm Capex +7.1% Y/Y; Q2 +1.9% 

--Japan Q3 Capex (Ex-Software) +1.2% Y/Y; Q2 -0.2% 

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

companies rose 7.1% on year in Q3, accelerating from a 1.9% in Q2, according to

a quarterly survey of major companies released by the Ministry of Finance

Monday.

     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 7.1% on year in

the July-September period, the 13th straight rise. The pace of increase

accelerated from 1.9% in April-June.

     --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 rose 6.4% on year in Q3 after falling

6.9% in Q2, while that in the non-manufacturing sector gained 7.6% against a

7.0% gain in Q2.

     --Capex excluding software rose 1.2% on year in Q3, accelerating from the

0.2% decline in Q2. Combined capital outlays (including software) fell a

seasonally adjusted 0.8% in Q3, marking the first drop in two quarters after

rising 2.9% in Q2.

     --The MOF survey, based on the demand side, is the key to calculating Q3

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

supply side data, rose 0.9% on quarter and pushed total domestic output up by

0.1 percentage point.

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

to revise up its estimate of Q3 real GDP growth from a preliminary +0.1% q/q, or

an annualized +0.2%. GDP growth in the Q3 to +0.4% q/q, or an annualized +1.8%

in Q2.

     --Combined non-financial current profits fell 5.3% y/y in Q3, following a

12.0% fall in Q2. Current profits at manufacturers fell 15.1% y/y in Q3 vs

-27.9% in Q2, while those at non-manufacturers rose 0.5% vs -1.5% in Q2.

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