Japan corporate capex rises despite weaker profits

TOKYO : 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 data out on Thursday showed Japanese firms raised capital expenditure in October-December by 7.7 per cent from the same period a year earlier.The data is used to calculate revised gross domestic product figures due on March 9. Preliminary estimates showed Japan's economy rebounded an annualised 0.6 per cent 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.The data also showed corporate recurring profits fell 2.8 per cent in the final quarter, down for the first time in eight quarters, to reach 22.3768 trillion yen.

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

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