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TOKYO (MNI) – Japan’s tertiary industry index, which measures
spending in the service sector, is expected to have risen a seasonally
adjusted 0.6% on month in November, posting the second rise in a row on
rush purchases of consumer electronics, according to the median forecast
of economists surveyed by Market News International.

The Ministry of Economy, Trade and Industry will release the
November data at 0850 JST on Wednesday, Jan. 19 (2350 GMT Tuesday).

The expected rise in November will follow +0.5% in October and
-0.8% in September. From January to October 2010, the index posted five
m/m rises and as many drops.

Mitsumaru Kumagai, chief economist at Daiwa Institute of Research,
sees the index will show a second straight monthly rise, saying,
“Last-minute demand (for consumer electronics) pushed up wholesale and
retail sales.”

Demand for some electronics products surged ahead of Dec. 1, when
the government halved the reward points it offers for buying
energy-efficient TVs, air conditioners/heaters and refrigerators.

Shipments of household electronics rose 67.4% on year in November,
accelerating from +49.3% in October and +24.7% in September, Japan
Electronics and Information Technology Industries Association said. In
particular, shipments of flat-screen TVs totaled a record 3.96 million
units, up 158.7% on year.

Reflecting such strong demand, combined sales at wholesale and
retail levels jumped a seasonally adjusted 3.6% in November from
October, METI data showed.

Looking ahead, Akira Maekawa, senior economist at Global Futures
and Forex, said, “The tertiary industry index may show signs of weakness
from now on, mainly because positive effects of stimulus measures
(prompting sales of greener household electronics) are likely to wane.”

The tertiary industry index hit the record high of 103.5 in August
2007, when Japan’s economy was still in the longest post-war expansion
period. It hit the record low of 94.4 in March 2009 in the aftermath of
the collapse of Lehman Brothers in September 2008.

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

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