— Japan Tertiary Index Posts 5th Rise In Past 12 Months
— Japan Oct Tertiary Index +0.9% Y/Y Vs Sep Revised +1.4%
— Japan Tertiary Index Posts 9th Y/Y Rise In Row
— Japan Oct Index M/M Rise Led By Computer Software Services

TOKYO (MNI) – Japan’s tertiary industry index, which measures
spending in the services sector, rose 0.5% in October from the previous
month, posting the first m/m rise in three months, the Ministry of
Economy, Trade and Industry said on Wednesday.

The October gain was the fifth in the past 12 months.

The figure came in stronger than the consensus call for a 0.3% rise
in a Market News International survey.

The October rise, led by higher spending on the information and
communications sector (computer software services), followed a revised
0.8% fall in September (initially -0.9% m/m), when activity was hit by
the slowdown in the motor vehicle sector.

The seasonally adjusted index rose to 98.3 in October from 97.8 in
September.

The index reached a record low reading of 94.4 in March 2009, when
it slumped 3.4% m/m, while the index hit a record high of 103.5 in
August 2007, when it rose 0.9% from the previous month.

In July-September, the tertiary industry index rose a revised 0.9%
on quarter, after showing a 0.1% fall in Q2 and a 1.1% gain in Q1.

From a year earlier, the unadjusted index rose 0.9% in October to
97.3, marking the ninth straight year-on-year rise after gaining a
revised 1.4% (preliminary +1.5%) in the previous month.

The 0.6% rise in February 2010 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 showed increased business
from the previous month include: information and communications (+4.5%),
wholesale and retail trade (+1.0%), finance and insurance service
(+1.3%), medical and welfare service (+0.9%), hotels and restaurants
(+1.4%), learning assistance service (+2.0%), as well as personal and
amusement services (+0.4%).

The industries that showed slower business from the previous month
were: utilities (-3.1% ), real estate and goods rental/leasing (-0.4%)
and compound services (-0.2%).

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 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
** Market News International Tokyo Newsroom: 81-3-5403-4835 **

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