— Retransmitting Story Published 21:33 ET Monday
— See Separate Table For Details Of Individual Forecasts

TOKYO (MNI) – Japanese Q2 GDP will be revised down to an annualized
2.2% drop from the 1.3% fall initially reported, reflecting an expected
downward revision to business investment, according to the median
forecast of 22 economists surveyed by Market News International.

The Cabinet Office will release revised (second preliminary) gross
domestic product data for April-June at 0850 JST on Friday, Sept. 9
(2350 GMT on Thursday).

The latest median forecast is slightly weaker than the -2.0%
annualized drop (-0.5% q/q) projected in an initial MNI survey of 10
economists released last week.

Preliminary GDP data released last month showed that Japan’s
economy contracted a real 0.3% q/q in Q2 (an annualized -1.3%), the
third consecutive quarterly q/q drop.

The March 11 earthquake disaster caused supply chain breakdowns
that curtailed automobile and electronics output and dampened business
and consumer sentiment.

According to economists polled, a large downward revision to
capital investment will more than offset a slight upward revision to a
private-sector inventory buildup.

Economists are basing their forecasts on the results of a quarterly
business survey by the Ministry of Finance released on Friday.

Capex will be revised down to -1.9% q/q from a preliminary +0.2%,
while the positive contribution of private-sector inventory changed to
GDP will be revised up to +0.3 percentage point from +0.2 point,
according to their median forecasts.

The MOF survey showed non-financial firm’s capex including software
fell 7.8% in the three months to June 30 from a year earlier, the first
drop in four quarters and the largest drop since -11.5% in Q1 2010.

Looking ahead, economists said preliminary Q3 GDP, which is due out
Nov. 14, will post a sharp rebound due to a faster-than-expected
recovery in industrial output.

Industrial production, a coincident indicator of the economy, is
expected to rise 6.3% q/q in July-September, which would be the first
gain in five quarters, according to a survey of firms by the Ministry of
Economy, Trade and Industry.

Forecasts for the Q3 GDP by 42 economists averaged +1.1% q/q
(annualized +4.6%), according to a survey by the Cabinet Office’s
Economic Planning Association.

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

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