Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
Last updated 1 hour, 33 minutes ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
Japan’s capex leaps in 2nd quarter
September 04, 2018
 Print    Send to Friend

TOKYO: Japanese corporate capital expenditure jumped in April-June by its most since 2006, raising hopes for sustainable economic recovery led by the private sector, although global trade tensions cloud the outlook for an export-reliant economy.

Ministry of Finance (MOF) data out on Monday showed capital expenditure in the second quarter rose 12.8 per cent from the same period last year, led by investment in the production of cars and electronic components.

It marked a seventh straight quarter of annual growth in capital expenditure after posting 3.4 per cent gain in the previous quarter. It was the sharpest annual gain since 2006. MOF capex data, which will be used to update gross domestic product (GDP) figures for the second quarter due out Sept. 10, points to upward revision to growth estimate, analysts say.

Capital expenditure has been a bright spot in Japan’s economy, the world’s third largest, as companies update their fixed assets and invest in automation and labour-saving technology to cope with labour shortages.

However, a major trade war stemming from commercial tensions between the United States and China could hit the world economy hard, which would in turn hurt Japan’s exports and discourage corporate investment.

“Second quarter GDP will be revised up,” said Toru Suehiro, senior market economist at Mizuho Securities. “Taking weakening factory output into account, however, capital expenditure will struggle to accelerate from now on.”

A preliminary estimate found Japan’s economy grew by an annualised rate of 1.9 per cent in the second quarter on solid household and business spending.

Underscoring solid business activity, the Markit/Nikkei Japan Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 52.5 in August, above the 50 threshold that separates contraction from expansion, as new orders accelerated.

Monday’s data comes after a recent batch of soft indicators such as factory output and retail sales cast doubts over the strength of Japan’s growth in the current quarter.

Capital expenditure, excluding software, grew 6.9 per cent in April-June from the previous quarter on a seasonally-adjusted basis, rising for a fourth straight quarter and the fastest gain since 2011, the MOF data showed.


Add this page to your favorite Social Bookmarking websites
Post a comment
Related Stories
Toshiba to cut 7,000 jobs
TOKYO: Toshiba Corp is liquidating its British nuclear power unit and selling its US liquefied natural gas (LNG) business, as the once-mighty industrial conglomerate seek..
Japan’s efforts to achieve inflation target hit by slow wage growth
TOKYO: Japan’s efforts to hit its elusive inflation target have been hampered by slow wage growth and intensifying global trade frictions but are now also facing headwind..
CBA signs pact with MUFG
SYDNEY/TOKYO: Commonwealth Bank of Australia (CBA) will sell its asset management arm to Mitsubishi UFJ Financial Group (MUFG) for $2.9 billion in a surprise sale, the la..
Japan’s retail sales rise
TOKYO: Japan’s retail sales rose for an 11th consecutive month in September from a year earlier but the pace of gains slowed from the prior month, in a sign private consu..
Japan’s inflation index ticks up
TOKYO: Japan’s annual core consumer inflation ticked up in September but remained at half the pace of the central bank’s elusive 2 per cent target, underscoring the chall..
Advertise | Copyright