— Japan MOF: Q3 Major Firm Sentiment +2.2 Pt Vs Q2 -3.1 Pt
— Japan MOF: Q3 Sentiment Worse Than +8.8 Pt Seen In Q1 Poll
— Japan MOF: Major Firm Sentiment Seen Q4 +5.4 Pt, Q1 +5.2 Pt
— Japan MOF: FY11 All Firm Capex Plans +9.8% Vs Q2 Poll +8.4%
— Japan MOF: FY11 All Firm Current Profit +5.7% Y/Y Vs Q2 +6.5%

TOKYO (MNI) – The business sentiment diffusion index for major
Japanese firms rebounded to +2.2 points in the July-September quarter
from -3.1 points in the previous quarter, led by brisk domestic demand,
the results of a quarterly government survey released on Tuesday showed.

The key figure marked the first rise in four quarters, hitting the
highest level since +6.6 points in Q3 of 2011, but missed the earlier
projection amid the fading impact of the government’s stimulus measures
and uncertainties about global growth.

In the previous survey released in March, the index for the third
quarter of 2012 was forecast to improve to +8.8 point.

The pace of year-on-year growth in new vehicle sales slowed to just
7.3% in August from 36.1% in July from 40.9% in June, 66.3% in May and
92.0% in April, as the government is expected to end subsidies for
buying greener automobiles this month.

In December the government revived subsidies for buying
low-emission vehicles. The program had been terminated in September
2010, which caused a year-long stagnation of domestic vehicle sales.

Business sentiment measured by the MOF survey hit a recent bottom
of -51.3 points in January-March 2009.

The index is computed by subtracting the percentage of companies
reporting deteriorating business conditions from the percentage of those
reporting an improvement. A positive figure indicates the majority of
firms see butter business conditions.

The latest survey also showed that major firms’ sentiment is
expected to rise to +5.4 points in the December quarter of 2012 (revised
down from +8.8 points seen in the previous survey) before slipping to
+5.2 points in the first quarter of 2013 (initial reading).

The survey showed that companies expect their combined capital
spending to rise 9.8% in fiscal 2012, up from a 8.4% rise seen in the
June poll, led by carmakers as well as retailers and wholesalers.

Manufacturers plan a 15.0% hike in spending in this fiscal year, up
from a 9.8% increase seen in the previous survey, while
non-manufacturers forecast a 6.8% rise in capex, compared with a 7.5%
increase in the Q2 poll.

The survey showed firms’ current profits will grow 5.7% in fiscal
2012, down from +6.5% forecast in the previous survey.

The Finance Ministry and the Cabinet Office conducted the joint
survey on Aug. 15, covering 15,707 companies capitalized at Y10 million
or over, of which 12,495 replied.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-6860-4821 **

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