5 November 2001, 08:55 OUTLOOK - Japan economic indicators for wk to Nov 9
TOKYO (AFX-ASIA) - The following lists the range of forecasts given
by surveyed economists for key economic indicators to be released this
week (compared with previous period data or previous estimate):
JAPAN SEPT LEADING INDEX, Monday (2:00 pm):
-- 37.5-42.9 pts (55.6; consensus 37.5)
Dresdner Kleinwort Wasserstein wrote: "Only the leading diffusion
index has remained resolutely upbeat although it is difficult to see
how this can possibly be sustained. The OECD set of leading indicators
due Friday are far more cautious on the outlook for Japan, rather more
justifiably one might think."
HSBC wrote: "In September, the leading DI probably fell back to the
level below the benchmark of 50 after the 55.6 recorded in the previous
month. We expect four indicators out of seven to deteriorate compared
with three months ago. Only money supply, building construction and
housing starts will improve."
Merrill Lynch wrote: "The leading DI recorded the second straight
above-50 pct mark in August, which would have been a sign of an
economic recovery by the beginning of next year. However, it is not
expected to sustain the trend but is likely to fall below the cut-off
line. The September result will still be just one component short, as
readings for construction data have been contributing positively since
their July strength. However, its sustainability is now in question,
with construction orders falling in September. The Leader may be
turning lower again."
JAPAN SEPT ALL-HOUSEHOLD SPENDING, Tuesday (2:00 pm):
-- down 1.3-3.1 pct yr-on-yr (down 1.1; consensus down 1.8)
Merrill Lynch wrote: "Real consumption spending at worker
households (about two-thirds of all multi-member households) rebounded
1.3 pct month-on-month, with year-on-year still down 1.3 pct. The
all-household result is expected to show a larger month-on-month
rebound, with a larger year-on-year decline, because of a sharp swing
of spending at non-worker households in September last year. The
forecast month-on-month rise would still leave all-household real
consumption spending slightly down quarter-on-quarter in the third
quarter."
HSBC wrote: "In September, all households' spending is likely to
have declined 1.5 pct year-on-year in real terms, falling for the sixth
consecutive month. Consumption fundamentals are deteriorating
drastically, as seen in the September unemployment rate, which jumped
to 5.3 pct, the worst on record."
JAPAN OCT DOMESTIC WPI, Thursday (8:50 am):
-- down 0.1-0.5 pct mth-on-mth (down 0.2; consensus down down 0.3)
-- down 0.8-1.3 pct yr-on-yr (down 1.1; consensus down 1.0)
Merrill Lynch wrote: "The domestic WPI is forecast to register a
relatively large month-on-month drop. This largely reflects the usual
impact from an end to the summer surcharge for electricity. We saw a
0.4 pct month-on-month dip in October last year. Year-on-year declines
of the domestic WPI are likely to remain steady at a cyclical low."
HSBC wrote: "In October, the domestic WPI is expected to have
declined 0.2 pct on the month and to have fallen 0.9 pct year-on-year,
down for 13 consecutive months on a year-on-year comparison. Due to the
sharp economic slowdown, deflationary pressure is strengthening."
JAPAN OCT M2+CDS, Thursday (8:50 am):
-- up 3.6-3.7 pct mth-on-mth (up 3.7; consensus up 3.7)
Merrill Lynch wrote: "Money supply data are likely to be largely
stable from September. M2+CDs are still benefiting from outflows of
postal savings. Demand for cash and highly liquid deposits remain
buoyed, while that for money in general, especially broader aggregates,
remain sluggish."
HSBC wrote: "Given that a shift of funds from postal-savings
deposits to cash or bank deposits peaked out in July, M2+CDs growth is
likely to have moved sideways at 3.7 pct year-on-year in October. The
growth could start slowing down in the coming months."
JAPAN SEPT PRIVATE MACHINERY ORDERS, Thursday (2:00 pm):
-- down 5.0-18.8 pct mth-on-mth (up 8.7; consensus down 10.1)
-- down 5.3-17.6 pct yr-on-yr (down 13.4; consensus down 9.0)
ING Baring wrote: "Machinery orders are likely to slip back after
strength in August. Amid growing gloom on industrial production, labour
demand and corporate profits, the machinery orders series is proving
remarkably resilient. Orders in September are expected to drop back,
but mainly in reaction to a surprising 8.7 pct month-on-month rise in
August. Attention will also focus on the government forecast for fourth
quarter orders because so far demand for capital equipment has not
fallen as much as the weakness in profits implies."
UBS Warburg wrote: "Although August data was quite bullish ... we
expect further contraction of capex demand both for domestic and
overseas."
HSBC wrote: "Private machinery orders are likely to have fallen a
huge 10.1 pct month-on-month in September, after a one-off rebound in
the previous month. This would result in July-September orders dropping
6.9 pct quarter-on-quarter, falling short of the Cabinet Office's
outlook of minus 5.1 pct. This should indicate that machinery orders
are clearly trending down."
Merrill Lynch wrote: "Core machinery orders are expected to give
back almost all their gains in August. Manufacturer orders probably
declined slightly, while non-manufacturer orders likely more than
erased the sharp increase in August. The forecast results would still
leave both manufacturers and non-manufacturers doing better than the
ESRI's respective forecasts for the third quarter. That may actually be
not too surprising, as the achievement ratios were showing signs of
improvement. Along with the September figures, the release of ESRI's
fourth quarter forecast, based on surveys in late September, will be of
great interest. Will it show an extension of the improving trend or a
sign of reversal after the economic deterioration in September and the
terrorist attack? The latter seems more likely."
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