— MNI Survey Median Forecast For Nov Tertiary Index: +0.6%
— Japan Tertiary Index Posts 6th Rise In Past 12 Mths; Oct Rev +0.3%
— Japan Nov Tertiary Index +2.5% Y/Y Vs OCT Revised +0.6%
— Japan Tertiary Index Posts 10th Y/Y Rise In Row
— Japan Nov Tertiary Index Rise Led By Wholesale, Retail Trade

TOKYO (MNI) – Japan’s tertiary industry index, which measures
spending in the services sector, rose 0.6% in November from the previous
month, posting the second straight m/m increase and the sixth in the
past 12 months, the Ministry of Economy, Trade and Industry said on
Wednesday.

The figure came in line with the consensus call of a 0.6% increase
in a Market News International survey.

The November increase was led by wholesale and retail trade in
machinery, building materials and consumer electronics, followed by a
revised 0.3% gain in October (initially +0.5% m/m).

Demand for some electronics products surged ahead of Dec. 1, when
the government halved the reward points it offers for buying TVs, air
conditioners/heaters and refrigerators that use less power to operate.

Shipments of household electronics rose 67.4% on year in November,
accelerating from +49.3% in October and +24.7% in September, Japan
Electronics and Information Technology Industries Association has said.
In particular, shipments of flat-screen TVs totaled a record 3.96
million units, up 158.7% on year.

The seasonally adjusted tertiary index rose to 98.6 in November
from 98.0 in October.

The reading of 94.4 marked in March 2009, when the index slumped
3.4% m/m, remains the lowest level on record. The index hit a record
high of 103.5 in August 2007, when it rose 0.9% from the previous month.

From a year earlier, the unadjusted index rose 2.5% in November to
97.3, marking the 10th straight year-on-year rise after gaining a
revised 0.6% (preliminary +0.9%) in the previous month.

The 0.6% rise in February 2010 was the first y/y increase in 19
months since +0.2% in July 2008.

The index posted a record 7.7% year-on-year drop in March 2009.

In the latest month, the industries that showed increased business
from the previous month include: wholesale and retail trade including
sales of household electronics (+3.3% m/m), scientific, professional and
technical services (+1.2%) and transport and postal activities (+0.2%).

The industries that showed slower business from the previous month
were: accommodations, eating and drinking services (-2.5%), personal and
amusement services (-2.6%) and miscellaneous services (-1.5%).

The service sector employs more than half of Japan’s workforce, and
spending on services such as retailing, dining and travel is closely
tied to changes in income and consumer confidence.

The METI changed the base year for the index to 2005 from 2000,
effective with the April 2009 data, resulting in revisions to past
figures dating from January 2003.

The ministry also re-grouped some service industries to reflect
changing business patterns. In particular, it divided up Japan Post’s
huge postal and financial services, which are now being privatized, and
reallocating them into “transport and postal activities” and “finance
and insurance.”

As a result, the category called “compound services” no longer
reflects Japan Post’s diversified postal and financial services but has
shrunk to show the limited commission business at post offices.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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