ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

Japan's capital spending up 7.7% despite weaker profits

Companies count on post-COVID recovery as Oct.-Dec. profits fell 2.8%

Japanese businesses increased spending on plant and equipment for the seventh straight quarter in October to December last year, raising hopes for demand-led economic growth.

TOKYO (Reuters) -- Japanese companies raised spending on plant and equipment for a seventh straight quarter in the final three months of 2022, data released on Thursday showed, offering relief to policymakers counting on a private demand-led recovery from COVID.

Ministry of Finance (MOF) data out on Thursday showed Japanese companies raised capital expenditure in October-December by 7.7% from the same period a year earlier.

It was the seventh straight quarter of annual gains.

The data is used to calculate revised gross domestic product (GDP) figures due on March 9. Preliminary estimates showed Japan's economy rebounded an annualized 0.6% in the fourth quarter.

The weaker-than-expected GDP growth was caused by a decline in capital spending, raising some doubt about whether the world's No. 3 economy can return to growth through private-sector investment and wage hikes which would in turn boost consumption.

Quarter-on-quarter, seasonally adjusted capital expenditure rose 0.5%, the data showed.

The data also showed corporate recurring profits fell 2.8% in the final quarter, down for the first time in eight quarters, to reach 22.3768 trillion yen.

All companies' sales rose 6.1% in October-December from a year earlier, up for seven straight quarters, it showed.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more