— Japan Q3 Non-Financial Firm Capex +2.2% Y/Y; MNI Forecast +2.9%
— Japan Q3 Non-Financial Firm Capex Posts 4th Straight Y/Y Rise
— Japan Q3 Capex (Ex-Software) S/A -2.5% Q/Q; MNI Forecast -5.6%
— Japan Q3 Capex (Ex-Software) 3rd Straight Q/Q Drop; Q2 -2.1%
— Japan Q3 Manufacturer Capex +0.5% Y/Y Vs Q2 +14.7%
— Japan Q2 Non-Manufacturer Capex +3.3% Y/Y Vs Q2 +3.9%
— Japan Q2 Non-Fncl Firm Current Profit +6.3% Y/Y Q2 +11.5%

TOKYO (MNI) – Combined capital investment by non-financial Japanese
companies rose at a slower pace in July-September than in the previous quarter
as the global slowdown eroded their profits, a government survey showed on
Monday.

The quarterly survey by the Ministry of Finance is the key to calculating
revisions to Q2 GDP due out on Dec. 10.

Non-financial firm capex marked a fourth straight quarterly rise, up 2.2%
on year in Q3, but the pace of growth decelerated sharply from a 7.7% increase
in the previous quarter. It was also lower than the median forecast for a 2.9%
rise by economists in a MNI survey.

The 7.7% rise in Q2 was the best reading since Q1 of 2007, when capex rose
13.6%.

Business investment excluding spending on software rose 2.4% from a year
before in Q3, also the four consecutive quarter of a year-on-year rise,
following a 6.6% increase in the previous quarter.

In the manufacturing sector, capex rose by a meager 0.5% in Q3 following a
14.7% jump in the previous quarter, the MOF survey showed.

Capex in the non-manufacturing sector increased 3.3% in Q3 following a 3.9%
growth in Q2.

On a seasonally adjusted, quarter-over-quarter basis, capex excluding
spending on software fell 2.5% in July-September following a revised 2.1% drop
(revised down from -0.5%) in the previous quarter.

The quarterly survey by the MOF also showed that the combined current
profits before extraordinary items of non-financial firms at the parent level
rose 6.3% from a year earlier in the third quarter, posting the third
consecutive year-on-year rise but slowing from a 11.5% rise in the previous
quarter.

The ministry surveyed 31,037 companies with capital at or above Y10 million
and received replies from 22,544.

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. 10.
Capex in preliminary GDP data is based solely on the supply side estimate.

In the preliminary GDP data released on Nov. 12, the economy contracted a
real 0.9% q/q (annualized -3.5%) in Q3 while capex fell 3.2% q/q (annualized
-12.1%).

–MNI Tokyo Bureau; tel: +81 90-4752-7020; email: yseki@mni-news.com
–MNI Tokyo Bureau; tel: +81 90-4670-5309; email: msato@mni-news.com

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