TOKYO : Japanese companies raised spending on plant and equipment in the July-September quarter, Ministry of Finance data showed on Thursday, in a sign business investment remains resilient and a boost to recovery from a COVID-19 induced downturn.
Solid capital expenditure could keep alive hopes for a private demand-led recovery, although overseas economies teetered on the edge of a global slump, led by China whose zero-coronavirus policy curbs have backfired on growth.
Japanese firms increased capital spending in the third quarter by 9.8 per cent from the same period a year earlier, Ministry of Finance data showed on Thursday, a sixth straight quarterly increase, the data showed.
On the quarter, seasonally-adjusted capital expenditure rose 2.4 per cent, up for a second straight month.
The data will be used to calculate revised gross domestic product figures due on Dec. 8, following a preliminary estimate that Japan’s economy shrank at an annualised clip of 1.2 per cent in the third quarter.
The economy remains fragile as it recovers from the COVID downturn. Still, Japan’s inflation rate remains moderate by the standards of other developed countries.
In a sign a weak yen may be helping boost profits at export-reliant big firms, the data showed corporate recurring profits rose 18.3 per cent in July-September, up for a seventh straight month, to reach 19.8 trillion yen ($144 billion), a record amount for the third quarter.
All firms’ sales rose 8.3 per cent in July-September from a year earlier, posting a sixth straight quarters.
($1 = 137.1600 yen)