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Economy

Japan July-September business spending slows on disasters

TOKYO (Kyodo) -- Capital spending by Japanese companies slowed in the July-September quarter following a string of natural disasters that weighed on economic activity, government data showed Monday.

Investment by all nonfinancial sectors for purposes such as building factories and adding equipment and software rose 4.5 percent from a year earlier to 11.28 trillion yen ($99 billion), easing from a 12.8 percent rise the previous quarter.

Still, the data released by the Finance Ministry showed companies raised capital spending for an eighth consecutive quarter amid moves to boost production capacity by chemical and semiconductor firms and increased investment in commercial facility development projects.

Quarter-on-quarter, capital spending excluding on software fell by 4.0 percent, the first decline in five quarters.

The data will be factored into a revision of gross domestic product figures for the third quarter of 2018, which the Cabinet Office is scheduled to release on Dec. 10.

Preliminary GDP data showed the world's third-largest economy shrank an annualized real 1.2 percent in the quarter as a powerful typhoon that temporarily shut down Osaka's main airport and an earthquake that caused an island-wide blackout in northern Japan's Hokkaido disrupted distribution channels and dented consumption.

Pretax profits at companies covered in the ministry's survey rose 2.2 percent from the previous year to 18.28 trillion yen while sales climbed 6.0 percent to 358.88 trillion yen, showing corporate profits continued to be robust in July-September.

The ministry surveyed 32,020 companies capitalized at 10 million yen or more, of which 23,409, or 73.1 percent, responded.

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