— Japan Q1 Non-Financial Firm Capex +3.3% Y/Y; MNI Fcast +1.0%
— Japan Q1 Non-Financial Firm Capex Posts 2nd Y/Y Rise In Row
— Japan Q1 Capex (Ex-Software) +3.5% Y/Y Vs Q4 +4.9%
— Japan Q1 Capex (Ex-Software) S/A -1.7% Q/Q; MNI F’cast -4.0%
— Japan Q1 Capex (Ex-Software) 1st Q/Q Drop in 2 Qtrs; Q4 +11.8%
— Japan Q1 Manufacturer Capex +3.8% Y/Y Vs Q4 +5.7%
— Japan Q1 Non-Manufacturer Capex +3.0% Y/Y Vs Q4 +8.6%
— Japan Q1 Non-Fncl Firm Current Profit +9.3% Y/Y Q4 -10.3%

TOKYO (MNI) – Combined capital investment by non-financial Japanese
companies rose for the second straight quarter in January-March, but at
a slower pace than in the previous quarter, while profits posted the
first rise in four quarters thanks to leap-year effects and despite the
global slowdown, a Ministry of Finance survey showed on Friday.

The survey is the key to calculating revisions to Q4 GDP due out on
June 8.

Non-financial firm capex rose 3.3% in the three months to March 31
from a year earlier, the second straight quarterly rise, following a
7.6% rise in the previous quarter.

The headline figure came in higher than economists’ median forecast
for a 1.0% rise in a MNI survey.

Business investment excluding spending on software rose 3.5% from a
year before in Q1, also marking the second straight quarterly increase,
following a 4.9% rise in the previous quarter.

Capex is believed to be supported by automobile production after
the government revived subsidies for buying low-emission vehicles in
December.

In the manufacturing sector, capex rose 3.8% in Q1 following a 5.7%
rise in the previous quarter, the MOF survey showed.

The increase was led by higher investment in production machinery,
electrical machinery, equipment and supplies as well as transportation
equipment.

Capex in the non-manufacturing sector rose 3.0% in Q1 following a
8.6% rise in the previous quarter, with increases seen in services, real
estate and construction.

On a seasonally adjusted, quarter-over-quarter basis, capex
excluding spending on software slipped 1.7% in the March quarter,
posting the first drop in two quarters after surging a revised 11.8% 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 9.3% from a year earlier in the first quarter.

It was the first year-on-year rise in four quarters following a
10.3% drop in the previous quarter.

Economic activity in March rebounded from a slump a year earlier,
when the massive earthquake caused a supply chain breakdown for cars and
electronics while many consumers outside disaster areas refrained from
spending out of respect for the victims.

The dampening effect of last year’s supply chain breakdown in
flood-hit Thailand, a key production center in the region, also eased in
January-March.

The ministry surveyed 30,256 companies with capital at or above Y10
million and received replies from 21,982.

The survey is the last piece of data from the demand side used to
compute revisions to gross domestic product for the first quarter due
out on June 8. 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 1.0% in January-March from the previous quarter, or an
annualized 4.1%, even though non-residential investment, or capex,
plunged 3.9%, or an annualized 14.8%.

tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4835 **

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