MNI DATA PREVIEW: Japan Q4 GDP Seen Contracting; 1st in 5 Qtrs

     TOKYO (MNI) - Japan's economy is seen contracting in Q4, weighed by weak

capital investment and slower domestic spending. It would be the first

contraction in 5 quarters and comes after the Oct. 1 sales tax hike and a string

on natural disasters that hit the country.

     Exports remained weak during the period, although net exports were a

significant boost to the economy as imports fell sharply.

     Economists are looking for preliminary Q4 GDP to fall 1.0% q/q, or an

annualized -3.8%, down sharply from the 0.3% q/q and +1.8% y/y gain in Q3. It

would be the first quarter of negative growth since Q3 2018. 

     Forecasts ranged from -0.8% to -1.9% q/q, or -3.0% to -7.5% at an

annualized pace.

     The Cabinet Office will release the data on Feb. 17at 0850 JST.

     --LOWER CAPEX, SPENDING

     Private consumption, around 60% of GDP, is seen falling 2.0% q/q after

+0.5% gain in Q3. Forecasts ranged from -1.8% to -3.3%.

     Capital investment is seen 1.7% q/q lower in the wake of the weak spending

by manufacturers as overseas demand remains sluggish. The BOJ's December

quarterly Tankan business survey showed business sentiment fell from three

months ago, although by-and-large remaining above historical averages.

     Major manufacturers, despite weak global demand, revised their capital

investment plans up. Non-manufacturers saw their investment plans hold steady as

they look to overcome labor shortages. However, sentiment among is expected to

worsen.

     --SOLID NET EXPORTS

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

to have made a positive 0.3 percentage point contribution to GDP, recovering

from -0.2 pp in Q3. Public investment is expected to rise 1.0% q/q, compared

with +0.9% in the third quarter.

     The average economist forecast for Q4 GDP growth is annualized at -3.55%,

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

for Economic Research conducted Dec. 23 to Jan. 7.

--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$$$,M$J$$$]