An employee shows a bottle of body cream to a customer at an exhibition and sale in Tokyo. Japan’s third-quarter economic growth is expected to be revised up from negative to just over flat – dodging a technical recession of two straight declining quarters, a Reuters poll found yesterday.

Reuters
Tokyo

Japan’s third-quarter economic growth is expected to be revised up from negative to just over flat – dodging a technical recession of two straight declining quarters – thanks to a rise in capital investment, a Reuters poll found.
The Cabinet Office will issue revised third-quarter GDP data on Tuesday.
A revision showing even just a glimmer of growth would be a boon for policymakers struggling to energise Japan’s listless economy and to convince sceptics that the government’s “Abenomics” policies are working.
The poll of 20 analysts found the economy probably grew an annualised 0.1% in July-September, versus the initial estimate of a 0.8% contraction. That would translate into a flat reading from the previous quarter compared with the 0.2% fall recorded in the first estimate.
“There are still uncertainties over the economic outlook, but we expect the economy will return to a moderate growth trend,” said Hidenobu Tokuda, senior economist at Mizuho Research Institute.
“Capital spending may slow down temporarily as machinery orders have been weak recently. But I think firms are still willing to increase business investment because of solid earnings. Spending to renew old equipment will likely grow gradually.”
Capital expenditure, a major component of GDP, is seen being revised up to a 0.7% gain for the quarter from a preliminary a 1.3% drop, the poll showed.
“Although the revised GDP will likely be better than the preliminary data, growth for July-September is expected to be nearly zero after it contracted in April-June. So there is no change to our view that the economy in the first-half of fiscal 2015 was stagnant,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
Separately, the government will release core machinery orders on Wednesday. Although highly volatile, it is regarded as a useful leading indicator of capital expenditure in the coming six to nine months. The poll found core machinery orders were expected to fall 1.5% in October following a 7.5% rise in September and a 5.7% drop in August. From a year ago, core orders were seen likely to grow 1.4% after a 1.7% slip in September, the poll showed.
The Cabinet Office will issue the machinery orders data on Wednesday.
Next week’s indicators include the current account balance on Tuesday, which is seen likely to show a surplus of ¥1.6tn ($13bn) in October. The corporate goods price index (CGPI), which measures the price companies charge each other for goods and services, is seen falling an annual 3.8% in November following a 3.8% fall in October. The Bank of Japan will issue the data on Thursday.
The government will compile a supplementary budget slightly exceeding 3tn yen to be announced on December 18, sources told Reuters.