— MNI Survey Median Forecast For Feb Tertiary Index: +0.1%
— Japan Tertiary Index Posts 1st M/M Rise In 2 Months; Jan -0.1%
— Japan Feb Tertiary Index +2.0% Y/Y Vs Jan +1.1%
— Japan Tertiary Index Posts 14th Y/Y Rise In Row

TOKYO (MNI) – Japan’s tertiary industry index, which measures
spending in the services sector, rose 0.8% in February from the previous
month, the first monthly rise in two months, on steady retail sales
before the March 11 disaster, data from the Ministry of Economy, Trade
and Industry released on Wednesday showed.

The figure came in stronger than the median forecast of a 0.1% rise
in a Market News International survey of economists.

The February rise was the seventh in the past 12 months, led by
wholesale and retail trade in household appliances as well as finance
and insurance. It followed a revised 0.1% fall in January (initially
+2.1% m/m).

Combined sales of retailers and wholesalers rose a revised 5.3% y/y
in February, following a 3.3% rise in January, METI data have shown.

Looking ahead, economists forecast the index will show a sharp
decline in March onward, hit by the March 11 disaster.

Japan’s seasonally adjusted Consumer Confidence Survey index
tumbled to the lowest level in nearly two years as the March 11
earthquake clouded prospects for income growth, general economic
well-being and job security, Cabinet Office said on Tuesday.

In today’s data, the seasonally adjusted tertiary index rose to
99.3 in February from 98.5 in January.

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 2.0% in February to
93.1, marking the 14th straight year-on-year rise after rising 1.1%
in the previous month.

The 0.2% rise in January 2010 was the first y/y increase in 18
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 (+1.8%),
scientific research, professional and technical services (+3.5%),
finance and insurance (+1.9%), transport and postal activities (+0.9%),
accommodations, eating and drinking services (+1.3%), miscellaneous
services (+0.8%), information and communication (+0.5%) and medical,
health care and welfare (+0.4%).

Among the industries that showed slower business from the previous
month were: utilities (-1.4%), personal services and amusement services
(-0.7%), learning support (-1.6%) and compound services (-3.9%).

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.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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