By Tetsushi Kajimoto
TOKYO (Reuters) – 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% 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%, 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% 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% 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% in July-September from a year earlier, posting a sixth straight quarters.
($1 = 137.1600 yen)
(Reporting by Tetsushi Kajimoto; Editing by Chang-Ran Kim and Kenneth Maxwell)
