REPEAT: MNI: Japan Q1 GDP Unrevised -0.6% Annualized; Capex Up

     TOKYO (MNI) - In the first quarter of 2018, Japan's economy contracted at

the same pace as estimated earlier, hit by the severe winter weather, with an

upward revision to business investment offset by a downward revision to private

inventories, revised Q1 GDP data released Friday showed.

     As reported in preliminary data last month, Japan's modest economic

recovery took a breather in the first quarter of 2018 as the severe winter

weather and high fresh food and fuel prices hurt consumption, mitigating the

positive effect of a slight gain in net exports.

     Economists expect the economy to return to an above-potential growth rate

of over 1% annualized in the second quarter and stay around that level until it

moves up to 2% in Q3 of 2019, just before the sales tax hike to 10% from 8%

planned for October 2019.

     The following are the key points from the revision, which is based on the

latest quarterly government business survey on capex and inventories as well as

other indicators.

     * The Q1 real gross domestic product contracted 0.2% on quarter, or an

annualized -0.6%, unrevised from the preliminary estimates. It was the first

contraction in nine quarters, since Q4 of 2015, when it shrank 0.3% on quarter,

or 1.2% on an annualized basis.

     * The domestic demand contribution was unrevised at -0.2 percentage point.

     * Business investment was revised up to +0.3% on quarter, or an annualized

+1.3%, from the initial reading of -0.1% on quarter, or an annualized -0.3%. It

was now the sixth straight quarter-on-quarter rise.

     * On the downside, the contribution of private-sector inventories to the

total domestic output was revised down to -0.2 percentage point from -0.1

percentage point.

     * Public investment was also revised down to -0.1% on quarter in Q1 from

being unchanged (+0.0%) It made a slightly negative contribution of -0.0

percentage point, compared to a preliminary +0.0 percentage point.

     * Net exports of goods and services -- exports minus imports -- made an

unrevised +0.1 percentage point contribution to the total domestic output. It

was the first positive contribution in two quarters after it pushed down Q4 GDP

growth by 0.1 percentage point.

     * Private consumption, which accounts for about 60% of GDP, was revised

down to -0.1% on quarter from the preliminary estimate of a slight drop (-0.0%).

It pushed down the Q1 GDP by -0.0 percentage point, unrevised from the initial

reading.

     * Q4 GDP was revised up to +0.3% q/q, or an annualized +1.0%, from +0.1%

q/q, or an annualized +0.6%.

     * In fiscal 2017 that ended on March 31, 2018, real GDP expanded 1.6%,

revised up from +1.5%.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com