— See Separate Table For Details

TOKYO (MNI) – Japan’s tertiary industry index, which measures
spending in the service sector, is expected to have risen a seasonally
adjusted 0.3% on month in October, the first rise in two months,
following a -0.9% fall in September, according to the median forecast of
economists surveyed by Market News International.

The Ministry of Economy, Trade and Industry will release the
October data at 0850 JST on Wednesday, Dec. 15 (2350 GMT Tuesday).

In September the index marked the first month-on-month drop in four
months and the sixth in the past 12 months.

Commercial sales, which have a major impact on the tertiary
industry index, rose a seasonally adjusted 0.8% m/m in October,
following -1.3% in September, the latest METI data showed.

Retail sales dropped on year in November on slumping car sales but
demand for some electronics products surged ahead of Dec. 1, when the
government halved the reward points it offers for buying TVs, air
conditioners/heaters and refrigerators that require less power to
operate.

Sales of household electronics rose 50.2% on year in October,
accelerating from +26.2% in September, led mainly by flat-screen TVs
whose sales jumped 143.7% y/y, according to Japan Electronics and
Information Technology Industries Association.

Department store sales in October rose 0.6%, the first year-on-year
rise in 32 months, as lower temperatures boosted sales of winter
clothing.

Yusuke Ichikawa, economist at Mizuho Research Institute, said
higher demand for custom-made computer software appears to have raised
the October tertiary industry index.

Meanwhile, depressed sales of automobiles and tobacco are expected
to have had a negative impact on the October index.

Automobile sales have slumped since the rush of purchases during
the summer before the government ended its subsidy program for buying
energy-efficient vehicles in early September.

Car sales posted a 23.2% y/y plunge in October, after -1.2% in
September and +37.7% in August.

Tobacco sales also surged ahead of the tax increase that took
effect October 1. Convenience store sales — which include tobacco —
fell 3.3% in October, after a robust 15.1% gain in September.

The tertiary industry index hit the record high of 103.5 in August
2007 and the record low of 94.4 in March 2009.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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