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REPEAT: MNI: Analysts See Japan Q3 GDP Revised Up Slightly

Repeats Story Initially Transmitted at 12:16 GMT Dec 1/07:16 EST Dec 1
     TOKYO (MNI) - Japanese third quarter gross domestic product will be revised
up slightly from the initial estimate as business investment appears to be
firmer than initially reported, economists forecast Friday.
     Analysts' forecasts for the revision are based on the latest government
quarterly business survey and other indicators, but economists warn unknown
factors could also affect the calculation.
     The annual benchmark revision of GDP may cause large-scale changes to past
figures that form the base for Q3 figures, while efforts to improve the GDP
calculation by increasing the share of supply-side information on private
consumption and business investment could lead to firmer consumption figures.
     The Cabinet Office will release revised (second preliminary) GDP data for
the July-September quarter at 0850 JST on Friday, Dec. 8 (2350 GMT Thursday,
Dec. 7).
     The median forecast by seven economists for revised Q3 GDP is +0.4% on
quarter, or an annualized +1.5%, up from the preliminary estimate of +0.3% q/q,
or an annualized +1.4%. The forecasts ranged from +0.3% to +0.5% q/q, or +1.3%
to +1.9% at an annualized pace.
     Capital investment is forecast by economists to be revised up to +0.3% on
quarter from the initial reading of +0.2%, with forecasts in a range of +0.2% to
+1.2%, following the Ministry of Finance's release Friday of its quarterly
survey of major companies.
     Economists expect private consumption, which accounts for about 60% of the
GDP, to be little unchanged from the preliminary estimate that showed a decline
of 0.5% on quarter, which pushed down the Q3 GDP figure by 0.3 percentage point.
     The contribution of private-sector inventories to the total domestic output
is forecast to be revised up to +0.3 percentage point from +0.2 percentage point
initially reported.
     Economists expect no change to the initial estimate that net exports of
goods and services -- exports minus imports and the key Q3 growth driver -- made
a positive 0.5 percentage point contribution to total domestic output. It was
the first positive contribution in two quarters after pushing down Q2 GDP growth
by 0.2 percentage point.
     On the downside, economists expect public investment to be revised down to
a drop of 2.9% on quarter in Q3 from a preliminary 2.5% fall. The forecasts
ranged from -2.3% to -3.5%.
     The Ministry of Finance survey showed that combined capital investment by
non-financial Japanese companies rose 4.2% on year in the July-September
quarter, the fourth straight quarter of increase after rising 1.5% in
April-June.
     On quarter, combined capital outlays (excluding software) posted the first
rise in two quarters, up 1.0% after falling 2.0% in Q2.
     The MOF's demand-side survey is the key to calculating revisions to Q3 GDP.
The capex figure in the preliminary GDP calculation is based solely on supply
side data.
     To improve its estimate of gross domestic product, the Cabinet Office will
increase the weighting of supply-side data in the calculation of private
consumption and business investment in equipment, effective with revised Q3 GDP
data.
     The proportion of demand-side data vs. supply-side data used to calculate
private consumption will change to 31% vs. 69% in the new calculation from the
existing 53% vs. 47%. The proportion of these data for business investment in
equipment will also be altered, to 49% vs. 51% from the current 58% vs. 42%.
     Going forward, economists expect Japan's economy to post continued modest
growth in the final quarter of 2017, backed by a pickup in capital investment
and exports as well as an expected rebound in private consumption.
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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