MNI DATA IMPACT: Japan Q4 GDP Posts 1st Contraction in 5 Qtrs

--Japan Q4 Real GDP -1.6% Q/Q, -6.3% Annualized

--Japan Q4 Domestic Demand Contribution -2.1 PP 

--Japan Q4 Capex -3.7% Q/Q, -0.6 PP Contribution 

     TOKYO (MNI) - Japan's economy contracted for the first time in five

quarters in Q4, down 1.6% q/q, or an annualized -6.3%. Growth was weighed by

weak demand in the private sector following a string of natural disasters and

the October 1 sales tax hike, preliminary GDP data released by the Cabinet

Office Monday showed.

     It was the sharpest contraction since Q2 2014, when GDP fell an annualized

-7.4% after a previous sales tax hike.

     The Q4 decline was much weaker than the MNI median forecast for contraction

of 1.0% q/q, or the annualized forecast of -3.8% and reversed a revised 0.1% q/q

rise in Q3.

     The key points from the latest GDP data:

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

2.9% q/q in Q4, after an unrevised 0.5% gain in Q3. The median forecast was for

a 2.0% q/q decline.

     --Business investment fell 3.7% q/q in Q4, the first drop in three

quarters, underperforming expectations.

     --Net exports of goods and services -- exports minus imports -- made a

positive 0.5 percentage point contribution to total domestic output, the first

positive contribution in three quarters after pushing Q3 GDP growth down by 0.3

percentage point.

     --Exports fell 0.1% on quarter in Q4 after falling 0.7% in Q3. Imports fell

2.6% after rising 0.7% in the previous quarter.

     --Private-sector inventories contributed a positive 0.1 percentage point to

Q4 GDP following -0.2 percentage point in Q3, while public investment rose 1.1%

on quarter, contributing 0.1 pp to GDP.

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