Pressured by Prime Minister Shinzo Abe to share some of their record profits, and by increasingly obsolescent equipment, Japan's companies are starting to boost their investment spending.
Policymakers have unleashed a public campaign to encourage the rebound, a new focus for the Abe administration after it saw some evidence of results from telling companies to increase wages. Whether the revival in capital spending keeps going will help determine the strength of Japan's recovery in the remainder of the year.
"Abenomics, aimed at a virtuous cycle in the economy, is entering a new stage — more than anything, the key to raising productivity is investment," the prime minister told executives at a gathering of the country's biggest business lobby on June 2 in Tokyo. "No matter how much we proceed with reforms, they are meaningless unless private companies implement investments."