— Japan Q3 Capex (Ex-Software) +4.8% Y/Y Vs Q2 -1.5%
— Japan Q3 Capex (Ex-Software) S/A +1.9% Q/Q Vs Q2 Rev +5.3%
— Japan Q3 Manufacturer Capex +9.1% Y/Y Vs Q2 -10.5%
— Japan Q3 Non-Manufacturer Capex +2.9% Y/Y Vs Q2 +3.4%
— Japan Q3 Non-Fncl Firm Current Profit +54.1% Y/Y Vs Q2 +83.4%

TOKYO (MNI) – The combined capital investment by Japanese
non-financial companies rose 5.0% in the third quarter of 2010 from a
year earlier, the first increase in 14 quarters, a government survey
showed on Thursday.

In the manufacturing sector, capex increased 9.1% from a year
earlier in the July-September quarter after falling 10.5% in the
April-June quarter and posting the first gain in nine quarters, the
quarterly survey by the Ministry of Finance showed.

Among the 11 industries in the manufacturing sector, five raised
capital investment. They included transportation equipment (+35.7% q/q),
information and communication electronics equipment (+34.1%) and
food (+28.5%).

Meanwhile, falls in capex were seen in six industries including
petroleum and coal products (-41.0%) and general machinery (-44.6%).

Capex in the non-manufacturing sector rose by 2.9% on the year in
the third quarter, decelerating from +3.4% in the second quarter but
marking the third consecutive y/y gain.

In the sector, increases in capex was led by construction (+22.3%),
goods rental and leasing (+14.9%), wholesale and retail trade (+8.0%)
as well as electric power suppliers (+7.8%).

Business investment excluding spending on software rose 4.8% from a
year before in Q3, posting the first gain in 14 quarters after falling
1.5% in Q2.

On a seasonally-adjusted, quarter-over-quarter basis, capex
excluding spending on software rose 1.9% in July-September, after a
downwardly revised 5.3% rise in Q2 (previously +6.4%).

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 54.1% from a year earlier in the third quarter,
posting the fourth straight y/y rise but slowing from the 83.4% gain in
previous quarter.

The increase was led by transportation equipment, information and
communication electronics equipment, whole sale and retail trade as well
as construction.

The ministry surveyed 31,137 companies with capital at or
above Y10 million and received replies from 23,009.

The survey is the last piece of data from the demand side used to
compute revisions to gross domestic product for the July-September
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
expanded a real 0.9% in July-September from the previous quarter (an
annualized 3.9%), a forth consecutive q/q rise, due mainly to strong
personal consumption.

When the Cabinet Office released its second preliminary estimate
for April-June, in September this year, real GDP was revised
upward to +0.4% q/q (annualized +1.5%) from a preliminary +0.1% q/q
(annualized +0.4%) increase.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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