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MNI (Tokyo)
     TOKYO (MNI) - Japan's economy likely expanded at a faster rate than
initially estimated in the October-December quarter, with business investment
appearing to be stronger than initially expected, economists forecast Friday in
the wake of a key government survey.
     The median forecast by six economists for revised Q4 GDP is +0.5% on
quarter, or an annualized +1.8%, compared with the preliminary estimate of +0.3%
q/q, or an annualized +1.4%. The forecasts ranged from +0.4% to +0.6% q/q, and
+1.5% to +2.5% annualized.
     Japan's economy bounced back from a weak Q3 in the October-December period,
thanks to higher private consumption and capital investment. The growth in the
fourth quarter followed a Q3 drop of 0.7% Q/Q, or an annualized -2.6%.
     The Cabinet Office will release revised (second preliminary) GDP data for
the October-December quarter at 0850 JST on Friday, March 8 (2350 GMT on
Thursday, March 7).
     --CAPEX UPWARD REVISION
     In October-December, capital investment is forecast by economists to be
revised up to 3.0% on quarter from the initial reading of +2.4%, with forecasts
ranging from +2.5% to +3.3%, based on the results of the Ministry of Finance's
survey.
     Combined capital investment by non-financial Japanese companies rose 5.7%
on year in the October-December quarter, after rising 4.5% in July-September.
     Capex excluding software gained 5.5% on year in Q4, accelerating from +2.5%
in Q3. Combined capital outlays (excluding software) rose a seasonally adjusted
3.3% in Q4, marking the first q/q rise in two quarters after falling a revised
4.4% in Q3.
     Economists expect private consumption, which accounts for about 60% of GDP,
to be unrevised at +0.6% on quarter. In the preliminary data released last
month, it pushed up the Q4 GDP by 0.3 percentage point.
     The contribution of private-sector inventories to the total domestic output
is forecast to be revised to -0.1 percentage point from -0.2 percentage point.
     Net exports of goods and services -- exports minus imports -- are expected
to have made a negative 0.3 percentage point contribution to the total domestic
output, unrevised from the preliminary estimate.
     Economists also expect public investment to be revised to -1.5% on quarter
in Q4 from -1.2%. Forecasts ranged from -1.3% to -2.0%.
     --SLOWER Q1
     Going forward, economists expects Japan's economy to slow in Q1, hit by
weak exports and industrial production caused by the slowing Chinese economy and
the heightened uncertainty over the global demand.
     The average economist forecast for Q1 GDP growth is annualized at 1.34%,
according to the latest monthly ESP Survey of 39 economists by the Japan Center
for Economic Research conducted from Jan 28 to Feb 4.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com
[TOPICS: MAJDS$,M$A$$$,M$J$$$]
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com