MNI DATA PREVIEW: Japan Q2 GDP Seen Revised Dn On Weaker Capex

     TOKYO (MNI) - Japan's economy likely expanded at a slower than initially

estimated in the April-June quarter, with business investment appearing to be

weaker than initially expected, economists forecast Monday after the release of

a key government survey.

     The median forecast by six economists for revised Q2 GDP is +0.3% on

quarter, or an annualized +1.3%, compared with the preliminary estimate of +0.4%

q/q, or an annualized +1.8%. The forecasts ranged from +0.1% to +0.5% q/q, and

+0.4% to +1.9% annualized.

     Despite the weak real export index and industrial production as the major

economic components, Japan's economy grew in Q2, thanks to strong private

consumption and public investment.

     The Cabinet Office will release revised (second preliminary) GDP data for

the April-June quarter at 0850 JST on Monday, September 9 (2350 GMT on Sunday,

September 8).

     --CAPEX DOWNWARD REVISION

     Q2 capital investment is forecast to be revised down to +0.8% on quarter

from the initial reading of +1.5%, with forecasts ranging from +0.1% to +2.0%,

based on the results of the Ministry of Finance's survey released on Monday.

     Combined capital investment by non-financial Japanese companies rose 1.9%

on year in the April-June quarter, for the 11th straight rise after rising 6.1%

in January-March.

     But capex excluding software fell 1.7% on year in Q2, decelerating from

+6.9% in Q1, indicating capital investment in the second quarter will be revised

down.

     Economists expect private consumption, which accounts for about 60% of GDP,

to be unchanged at 0.6% on quarter. In the preliminary data released last month,

it pushed up the Q2 GDP by 0.3 percentage point. The contribution of

private-sector inventories to the total domestic output is forecast to be

revised to -0.2 percentage point from -0.1 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, unchanged from the preliminary estimate.

     Economists also expect public investment to be revised to +1.8% on quarter

in Q2 from +1.0%. Forecasts ranged from +1.3% to +2.4%.

     --FASTER Q3 GDP

     Economists expects Japan's economy to grow in Q3, boosted by front-loaded

demand before the October 1 consumption tax hike. But exports are likely to

remain weak during the period on the back of the escalated trade friction and

the slowdown in overseas economies.

     The average economist forecast for Q3 GDP growth is annualized at 1.30%,

according to the latest monthly ESP Survey of 37 economists by the Japan Center

for Economic Research conducted from July 25 to August 1.

     The focus for BOJ economists how the expected slowdown in Japan's economy

for the fourth quarter will be temporary and how the economy will pick up in or

after the first quarter of 2020.

--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: M$A$$$,M$J$$$]