MNI DATA: Japan Q4 GDP Seen Revised Up On Solid Capex-Analysts

     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