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TOKYO — Japanese companies raised
spending on plant and equipment in January-March at the fastest
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rate since 2015, led by a recovery in car output and chip making
as well as service-sector investment in real-estate, reflecting
moderate economic growth.
Capital spending has been a bright spot for Japan’s economy,
the world’s third largest, which emerged from a pandemic-induced
slump in the first quarter buoyed by rebounding consumption and
surprise gains in business expenditure.
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Japanese firms raised capital expenditure by 11.0% in
January-March from the same period a year earlier, posting an
eighth straight quarter of gains, Ministry of Finance (MOF) data
showed on Thursday.
That marked the fastest gain since July-September in 2015.
On a seasonally-adjusted basis, capital expenditure rose
2.3% quarter-on-quarter in January-March.
The MOF data is used to calculate revised gross domestic
product figures for the quarter due on June 8 and follows a
preliminary estimate the economy grew by an annualized 1.6% in
January-March, twice as fast as expected.
By sector, manufacturers raised capital expenditure by 11.3%
year-on-year in the first quarter, while service-sector capital
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spending rose by 10.8% in the same period, according to the
data.
In a positive sign of future appetite for more investment
and further wage hikes, Japanese firms increased recurring
profits by 4.3% year-on-year in January-March to 23.8 trillion
yen ($176.23 billion), a first-quarter record.
By sector, manufacturers’ profits declined by 15.7%
year-on-year in the first quarter, while service-sector profits
grew by 17.2% in the same period.
The MOF data also showed Japanese firms’ sales grew 5.0% in
the January-March quarter year-on-year.
($1 = 135.0500 yen)
(Reporting by Tetsushi Kajimoto; Editing by Jacqueline Wong and
Jamie Freed)
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