Japan corporate capex rises 1.6% on year in April-June
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TOKYO, Sept 1 : Japanese corporate spending on plant and equipment rose 1.6 per cent in April-June versus the same period a year earlier, Ministry of Finance data showed on Tuesday, signalling domestic demand was underpinning the economy.
The result, which will be used to calculate revised gross domestic product figures due on September 8, is likely to support the case for the central bank to raise its policy interest rate at its next board decision on September 18.
Preliminary data last month showed the economy expanded by an annualised 1.1 per cent over the three months, slowing from 1.9 per cent in the previous quarter due to softer household and business spending.
The capital spending figure compared with a near-flat result in the previous quarter. Spending grew 1.5 per cent on a seasonally adjusted quarterly basis.
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The data also showed corporate sales rose 5.9 per cent in the quarter from a year earlier, and recurring profit increased 24.6 per cent.
Capital expenditure is a key gauge of domestic demand-led economic growth.
Companies have been generally bullish about spending in recent years, backed by appetite for investment in information technology to offset a persistent labour crunch in the fast-ageing population.
The government has pledged to use fiscal spending to spur private investment, arguing that stronger capital expenditure is essential to increasing growth potential and improving productivity.
The pledge focuses on sectors the government deems critical to long-term growth, including artificial intelligence, semiconductors, advanced manufacturing and energy infrastructure.
Source: Reuters
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