— Japan Tertiary Index Posts 1st M/M Drop In 4 Months
— Japan Tertiary Index Posts 6th Drop In Past 12 Months
— Japan Sep Tertiary Index +1.5% Y/Y Vs Aug Revised +2.5%
— Japan Tertiary Index Posts 8th Y/Y Rise In Row
— Japan Sep Tertiary Index M/M Drop Due to Slower Car Sales

TOKYO (MNI) – Japan’s tertiary industry index, which measures
spending in the services sector, fell 0.9% in September from the
previous month, posting the first m/m drop in four months and the sixth
in the past 12 months, the Ministry of Economy, Trade and Industry said
on Tuesday.

The figure came in weaker than the consensus call of a 0.5% fall.
The September decrease, led by slower motor vehicle sales, followed by a
revised 0.1% gain in August (initially -0.2% m/m).

Automobile sales slumped in the month as there had already been
rush purchases before the government ended its subsidy program for
buying energy-efficient vehicles in early September.

The seasonally adjusted index slipped to 97.9 in September from
98.8 in August.

The reading of 94.4 marked in March 2009, when the index slumped
3.4% m/m, remains the lowest level on record.

Historical data show that 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 1.0% 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 1.5% in September to
99.5, marking the eighth straight year-on-year rise after gaining a
revised 2.5% (preliminary +2.4%) 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 slower business
from the previous month include: wholesale and retail trade including
motor vehicle sales (-1.6% m/m), information and communications (-3.7%)
as well as personal and amusement services (-3.6%).

The industries that showed increased business from the previous
month were: miscellaneous services excluding government services
(+1.1%), finance and insurance (+0.5%) and compound services (+4.1%).

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: 81-3-5403-4833 **

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