REPEAT: MNI: Japan Q4 GDP Posts Slow Growth on Spending, Capex

--Japan Q4 Real GDP +0.1% Q/Q; Median +0.2%

--Japan Q4 Real GDP +0.5% Annualized; Median +0.9%

--Japan Q4 GDP Posts 8th Straight Q/Q Growth

--Japan Q4 Domestic Demand Contribution +0.1 Pct Point

--Japan Q4 Net Export Contribution -0.0 Pct Point

--Japan Q4 Consumption +0.5% Q/Q, +0.3 Point Contribution

--Japan Q4 Capex +0.7% Q/Q, +0.1 Point Contribution

--Japan Q4 Private Inventory Contribution -0.1 Pct Point

--Japan Q4 Public Investment -0.5% Q/Q, -0.0 Point Contribution

--Japan Q3 Real GDP Unrevised at +0.6% Q/Q

--Japan Q3 Real GDP Revised +2.2% Annualized; Prelim +2.5%

--Japan Q4 Deflator Unchanged Y/Y Vs Q3 +0.2%

--Japan Q4 Domestic Demand Deflator +0.5% Y/Y; Q3 +0.5%

     TOKYO (MNI) - Japan's economy for the October-December quarter posted a

modest 0.1% rise on quarter, or an annualized 0.5%, as a rebound in consumer

spending and continued solid capital investment offset weak net exports and

public works spending, the Cabinet Office said Wednesday.

     The median economist forecast was +0.2% q/q, or an annualized +0.9%.

     The eighth straight quarterly expansion in GDP followed strong growth of an

unrevised 0.6% growth on quarter, or an annualized +2.2% (revised from

preliminary +2.5%), in July-September.

     --SPENDING REBOUNDS

     Private consumption, which accounts for about 60% of GDP, rose 0.5% on

quarter in Q4, marking the first rise in two quarter after a downwardly revised

-0.6% in Q3. The median forecast was +0.4% on quarter, ranging from -0.1% to

+0.7%.

     Business investment rose 0.7% on quarter in Q4 (the median forecast was

+1.1%) for the fifth straight q/q increase, with the pace of increase slowing

from +1.0% in Q3.

     Net exports of goods and services -- exports minus imports and the key Q4

growth driver -- made a negative 0.0 percentage point contribution to total

domestic output, as largely expected (the median forecast was -0.1 percentage

point). It was the first negative contribution in two quarters after pushing up

Q3 GDP growth by 0.5 percentage point.

     Exports rose 2.4% on quarter in Q4 for the second straight rise after

rising 2.1% in Q3 while imports gained at a faster pace of 2.9% after falling

1.2% in the previous quarter.

     Private-sector inventories pushed down Q4 GDP by 0.1 percentage point (vs.

the median forecast of -0.1% point) following +0.4 percentage point in Q3.

Inventory drawdowns are a result of increased shipments of goods, a good sign

for sustained economic growth.

     Public investment fell 0.5% on quarter, the third straight q/q drop. Its

contribution to GDP was -0.0 percentage point.

     --MODEST GROWTH CONTINUES

     Going forward, economists expect Japan's economy to post continued modest

growth in the first quarter of 2018, backed by a pickup in capital investment

and exports as well as solid private consumption.

     Companies have been cautious about implementing capital investment amid

uncertainty over global and domestic demand, although capital investment plans

in the current fiscal year have been solid.

     Household spending has also been largely flat due to slow wage hikes and

concerns about the sustainability of social security programs.

     --ABOVE 1% GDP

     The average economist forecast for Q1 GDP growth is an annualized 1.21%,

according to the latest monthly ESP Forecast Survey of 40 economists by the

Japan Center for Economic Research conducted from Jan. 26 to Feb. 1.

     The survey showed economists projected GDP growth to continue just above 1%

in the coming quarters through the first half of calendar 2019.

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