MNI DATA PREVIEW: Japan Q3 GDP Seen Little Changed From Prelim

Japan's economy likely grew at the initially estimated pace in Q3 as business investment seemed little changed, economists forecast following recent key government survey.

The median forecast of six economists for revised Q3 GDP is unchanged from the preliminary estimate of +5.0% on quarter. On an annualised basis, the growth outlook was revised to +21.3% from an estimate of +21.4%. The forecasts ranged from 4.9% to +5.1% q/q, and 20.9% to 22.1% annualized.

CAPEX

Economists forecast capital investment to be revised down to -3.5% on quarter in the July-September period from the initial reading of -3.4%. Forecasts ranged from -3.1% to -3.5%, based on the Ministry of Finance's survey released on Tuesday, which reflects the demand side and is key to Q3 GDP revisions.

Capex, excluding software, fell 11.6% y/y in Q3, down from -10.4% in Q2. The manufacturing and non-manufacturing sectors recorded capex declines of 9.7% y/y and 12.1% y/y. Capex. based solely on supply side data in the preliminary report, fell 3.4% on quarter and pushed total domestic output down by 0.6 percentage point.

Economists expect private consumption, which accounts for about 60% of GDP, to be unchanged at +4.7% on quarter. In the preliminary data released last month, it pushed up Q3 GDP by 2.6 percentage point. The contribution of private-sector inventories to total domestic output is forecast at an unrevised -0.2 percentage point. Net exports of goods and services are expected to have contributed an unchanged positive 2.9 percentage points.

Economists also expect public investment to be revised to +0.5% on quarter in Q3 from +0.4%.

The Cabinet Office will release revised (second preliminary) GDP data for the July-September quarter at 0850 JST on Tuesday, December 8 (2350 GMT on Monday, December 7). Private economists warned that the data will deviate from their forecasts as the government changed the base year to 2015 from 2011.