MNI DATA IMPACT: Japan Q4 GDP Revised Lower on Weaker Capex

--Japan Q4 GDP Rev -1.8% Q/Q; Prelim -1.6%; MNI Median -1.7% 

--Japan Q4 Annualized GDP Rev -7.1% Vs -6.3%; MNI Median -6.8% 

--Japan Q4 Capex Rev -4.6% Q/Q; Prelim -3.7%; Median -4.7% 

--Japan Q4 Capex Contribution Revised At -0.7 Point Vs. -0.6 pt

--Japan G4 Private consumption -2.8% Q/Q Vs. -2.9%; Median -2.8% 

--Japan Q4 Net Export Contribution Unrevised +0.5 Pct Point

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

estimated in the October-December quarter, with business investment weaker than

first reported, revised data released by the Cabinet Office Monday showed.

     The economy contracted 1.8% q/q, or an annualized 7.1%, in Q4, weighed down

by weaker capital investment and sluggish private consumption.

     The main points of note include:

     --Real Q4 GDP was revised down from the preliminary estimate of -1.6% on

quarter and an annualized 6.3%, weaker than the MNI median forecast of -1.7%

q/q, or annualized -6.8%, drop.

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

down to a 4.6% fall from a preliminary -3.7%. There was a 0.2% rise in Q3.

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

to -0.7 percentage point from -0.6 pp initially.

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

-2.8% (prelim -2.9%) q/q. It pushed overall GDP lower by a revised rounded -1.5

pp vs. -1.6 pp.

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

at +0.5 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 also revised to 0.0 pp from +0.1 pp.

     --Japan's economy may contract in Q1 again, weighed by the drop in weak

exports and production as well as private consumption as the coronavirus impact

picks up, with Bank of Japan economists expecting   exports, production and

private consumption, to remain weak.

     --Those officials still hold the baseline scenario based on the view by the

International Monetary Fund that China's economy is expected to return to normal

in the April-June quarter.

     --However, the yen's rise to JPY103 level is increasing downside risks to

economic activity and prices.

     --The average economist forecast for Q1 GDP growth is annualized at +0.33%,

according to the latest monthly ESP Survey of 35 economists by the Japan Center

for Economic Research conducted from January 28 to February 5.

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