— Japan Mar Tertiary Index +1.6% Y/Y Vs Feb Revised +0.8%
— Japan Tertiary Index Posts 2nd M/M Drop In Row
— Japan Tertiary Index Posts 2nd Y/Y Rise In Row

TOKYO (MNI) – Japan’s tertiary industry index, which measures
spending in the services sector, fell 3.0% in March from the previous
month, posting the second consecutive month-on-month drop, the Ministry
of Economy, Trade and Industry said on Tuesday.

The March drop came after a revised 0.3% fall in February (vs.
-0.2% reported earlier) and was the sixth m/m drop in the past 12
months.

The seasonally adjusted index dipped to 95.5 in March from a
revised 98.5 in February and a revised 98.8 in January, which was the
highest level since 100.2 in November 2008.

The reading of 94.4 marked in March 2009 remains the lowest level
on record.

Historical data show that the index hit a record high reading of
103.5 in August 2007, when it rose 0.9% from the previous month.

From a year earlier, the unadjusted index rose 1.6% in March to
106.5, marking the second straight year-on-year rise after rising a
revised 0.8% in the previous month (preliminary +0.4%). It was the
largest y/y gain since +1.9% in February 2008.

The 0.8% rise in February this year 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 saw slower business from
the previous month were: information and communications (-8.4%),
wholesale and retail trade (-4.3%), scientific, research, professional
and technical services (-3.2%), learning support (-1.2%), utilities
(-0.8%), finance and insurance (-0.5%) and medical, health care and
welfare (-0.4%).

The industries that showed increased business from the previous
month were: compound services (+4.2%), miscellaneous services (+1.3%),
personal and amusement services (+1.2%), transport and postal activities
(+0.7%) and real estate and goods rental/leasing (+0.5%).

The category of accommodations, eating and drinking services was
unchanged.

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 has 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
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