MNI DATA PREVIEW: Japan Q3 GDP Seen Revised Up On Capex Gains

     TOKYO (MNI) - Japan's economy likely expanded faster than initially

estimated in the third quarter, with business investment appearing to be

stronger than first seen, economists forecast in the wake of a key government

survey published Monday.

     The median forecast by six economists for revised Q3 GDP is +0.2% on

quarter, or an annualized +0.9%, compared with the preliminary estimate of +0.1%

q/q, or an annualized +0.2%. The forecasts ranged from +0.2% to +0.3% q/q, and

+0.7% to +1.2% annualized.

The real export index calculated by the Bank of Japan based on the Ministry of

Finance trade data for the third quarter rose 1.8% on quarter but industrial

production fell 0.5% q/q.

     Capital investment to help cope with the labor shortages and increase

efficiency through research and development remained solid through the period,

underpinning growth somewhat.

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

0850 JST on Dec 9 (2350 GMT on Dec 8).

     --UPWARD CAPEX REVISION

     capital investment is forecast to be revised up to +2.0% q/q in Q3 from the

initial reading of +0.9%, with forecasts ranging from +1.1% to +2.0%, based on

the results of the Ministry of Finance's survey.

     Combined capital investment by non-financial Japanese companies rose 7.1%

on year in Q3, for the 12th straight rise following a 1.9% rise in Q2, the

report showed.

     --DOMESTIC DEMAND

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

to be unchanged at 0.4% q/q. In the preliminary data released last month, it

pushed up the Q3 GDP by 0.2 of a percentage point. The contribution of

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

unchanged at -0.3 percentage point.

     --NET EXPORTS WEIGH

     Net exports of goods and services -- exports minus imports -- are expected

to have made a negative 0.2 percentage point contribution to the total domestic

output, unchanged from the preliminary estimate.

     Economists also expect public investment to be revised to +0.9% on quarter

in Q3 from +0.8%. Forecasts ranged from +0.7% to +1.8%.

     --WEAKER Q4 GDP

     Going forward, economists see Japan's economy contracting in Q4, with

weaker private consumption following Q3's front-loaded rise in demand before the

consumption tax hike. 

     Exports are likely to remain weak during the period on the back of the

sustained sluggishness of overseas demand.

     The average economist forecast for Q4 GDP growth is annualized at -2.65%,

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

for Economic Research conducted from October 28 to November 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$$$,M$J$$$]