— Japan Q1 GDP Revised +1.2% Q/Q Vs +1.0%; MNI Fcast +1.1%
— Japan Q1 GDP Revised +4.7% Annualized; +4.1%; MNI Fcast +4.5%
— Japan Q1 Capex Revised To -2.1% Q/Q; -3.9%; MNI Fcast -2.9%
— Japan Q1 Private Inventories Rev +0.3 Pt; +0.4 Pt; MNI +0.3 Pt
— Japan Q1 Private Consumption Revised To +1.2% From +1.1%
— Japan Q1 Domestic Demand Contribution Rev +1.0 Pt; +0.9 Pt
— Japan Q1 Net Export Contribution Unrevised +0.1 Pt

TOKYO (MNI) – Japan’s economy expanded by a real 1.2% on quarter in
January-March, revised up from a preliminary 1.0% rise thanks to an
upward revision to a sharp drop in business investment, as largely
expected, Cabinet Office data showed Friday.

On an annualized basis, GDP rose 4.7%, revised up from a
preliminary 4.1% rise.

The economy expanded for the third straight quarter on an
annualized basis after growing 0.1% (flat on quarter) in Q4 and 7.8%
(+1.9% q/q) in Q3 last year.

The revised 1.2% rise (+4.7% annualized) in Q1 was higher than the
median forecast for +1.1% (+4.5% annualized) in a MNI survey of
economists.

Economists had expected Q1 GDP to be revised up from the initial
estimate as the latest quarterly survey by the Ministry of Finance
released last week showed a rise in business investment in factories and
offices in the first quarter of 2012.

The MOF survey showed that non-financial firm capex including
software rose 3.3% y/y in Q1, marking the second consecutive y/y rise
and after rising 7.6% in Q4 and falling 9.8% in Q3.

The Cabinet Office uses this key piece of demand-side data to
calculate revisions to the first preliminary GDP, which is based only on
supply side capex information.

The latest estimate for private non-residential investment, or
capex, was revised up to a 2.1% quarter-on-quarter fall from the 3.9%
drop initially reported.

Capex pushed down Q1 GDP by 0.3 percentage point, instead of -0.5
percentage point as reported last month.

Private-sector inventories, another major factor in calculating
revisions to GDP, pushed up Q1 GDP by 0.3 percentage point, down from
the preliminary +0.4 percentage point.

As a result, the contribution of domestic demand to the first
quarter GDP was revised up to +1.0 percentage point from the +0.9
percentage point originally reported.

Among domestic demand components, private consumption, which makes
up about 55% of GDP, rose 1.2% q/q in the first quarter, revised up from
+1.1%. Its contribution was unchanged at +0.7 percentage point.

As seen in last month’s preliminary data, net exports (exports
minus imports) provided a positive 0.1 percentage point contribution to
Q1 GDP after cutting Q4 GDP by 0.7 point.

Exports rose a revised 3.0% q/q in Q1 vs. a preliminary 2.9% rise
(-3.7% in Q4) while imports gained an unrevised 1.9% q/q (+0.9% in Q4).

In nominal terms, too, the economy grew 1.2% on quarter, revised up
from a preliminary 1.0% rise, or annualized 4.9%, revised up from the
initial estimate of +4.1%.

In fiscal 2011 to March 31, 2012, real GDP stood at -0.0%
(unrevised), marking the first drop in two years after growing 3.2% in
fiscal 2010.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4833 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]