Oct-Dec 2015 2nd Preliminary GDP Estimate

◆The real GDP growth rate for Oct-Dec 2015 (2^nd preliminary est) was revised upwards slightly to -1.1% q/q annualized (-0.3% q/q) in comparison to the 1^st preliminary report (-1.4% q/q annualized and -0.4% q/q). Results also exceeded market consensus due to the upward revision of capex, which was expected to be revised downwards on the 1^st preliminary report, and the upward revision of inventory investment, which was seen marking time on the 1^st preliminary report. All in all, these results confirmed our previous opinion that Japan’s economy was in a lull during the fourth quarter.

◆Performance by demand component in comparison to the 1^st preliminary results shows personal consumption and public investment recording downward revisions, while inventory and capex achieved slight upward revisions, helping to increase overall results. Capex was revised upwards to +1.5% q/q in comparison to +1.4% on the 1st preliminary report due to corporate statistics. Meanwhile, inventory investment was revised upwards slightly to -0.0% pt q/q in comparison to -0.1% pt on the 1^st preliminary report, exceeding market expectations at -0.1% pt.