— Japan Q3 Non-Financial Firm Capex -9.8% Y/Y; MNI Forecast -4.3%
— Japan Q3 Capex Posts 2nd Straight Y/Y Fall; Q2 -7.8%
— Japan Q3 Capex (Ex-Software) -11.0% Y/Y Vs Q2 -8.2%
— Japan Q3 Capex (Ex-Software) S/A -2.7% Q/Q; MNI F’cast +4.0%
— Japan Q3 Capex (Ex-Software) 4th Q/Q Drop In Row; Q2 -6.3%
— Japan Q3 Manufacturer Capex -1.6% Y/Y Vs Q2 -2.0%
— Japan Q3 Non-Manufacturer Capex -14.3% Y/Y Vs Q2 -10.7%
— Japan Q3 Non-Fncl Firm Current Profit -8.5% Y/Y Q2 -14.6%

TOKYO (MNI) – Combined capital investment by non-financial Japanese
companies fell at a faster-than-expected pace in the July-September
quarter as the global slowdown and the high yen cloud prospects for a
sustained export-led recovery, a government survey showed on Friday.

The quarterly survey by the Ministry of Finance is the key to
calculating revisions to Q3 GDP due out on Dec. 9.

Non-financial firm capex tumbled 9.8% in the three months to Sept.
30 from a year earlier, posting the second straight y/y fall following a
7.8% drop in the previous quarter. It was the largest decline since
-11.5% in Q1 of 2010.

The headline figure came in worse than the median forecast for a
4.3% drop in a Market News International survey.

Business investment excluding spending on software fell 11.0% from
a year before in Q3, also the second straight quarter of a year-on-year
decline, following a 8.2% fall in the previous quarter.

The yen hit an all-time high of Y75.32 on Oct. 31, prompting the
Bank of Japan, on behalf of the Ministry of Finance, to spend some Y9
trillion to buy dollars in the foreign exchange market, seeking to
weaken the value of the yen. The previous record high of Y75.95 was
marked in August.

In the manufacturing sector, capex declined 1.6% in Q3 following a
record 2.0% decline in the previous quarter, the MOF survey showed.

Capex in the non-manufacturing sector tumbled 14.3% in Q3 following
a 10.7% drop in the previous quarter.

On a seasonally adjusted, quarter-over-quarter basis, capex
excluding spending on software fell 2.7% in the September quarter,
marking the fourth straight quarterly drop after a revised fall of 6.3%
in the previous quarter.

It was much weaker than the median forecast for a 4.0% rise in
MNI’s survey.

The quarterly survey by the MOF also showed that the combined
current profits before extraordinary items of non-financial firms at the
parent level dropped 8.5% from a year earlier in the third quarter,
posting the second consecutive year-on-year decline, following a 14.6%
drop in the previous quarter.

The drop in Q2 current profits was the largest since -32.4% in Q3
of 2009.

The ministry surveyed 30,954 companies with capital at or above Y10
million and received replies from 22,666.

The survey is the last piece of data from the demand side used to
compute revisions to gross domestic product for the third quarter due
out on Dec. 9. Capex in preliminary GDP data is based solely on the
supply side estimate.

Preliminary data released last month showed that Japan’s economy
grew a real 1.5% in the September quarter from the previous quarter, or
an annualized 6.0%, as non-residential investment, or capex, rose 1.1%.

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

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