Japanese businesses have pared back their capital investment as the tariff campaign of the administration of U.S. President Donald Trump has intensified.

Capital expenditure on goods excluding software gained for a fifth consecutive quarter in the three months through June, but slowed to a pace of 0.2% compared to the previous period, the Finance Ministry reported Monday. That compares with a 1.3% gain in corporate investment reported in the preliminary reading of Japan’s gross domestic product. The latest reading will be factored into a revised GDP report for the period ended in June due on Sept. 8.

Compared with a year ago the figures looked stronger, with investment including software rising 7.6%, compared with the median estimate of a 6.1% gain. Profits increased 0.2% from a year earlier while sales gained 0.8%.

The data provide clues as to how companies are planning for the future at a time when global trade frictions centered largely around U.S. policies have increased economic uncertainties. In the second quarter, the U.S. raised auto tariffs on Japan by an extra 25% and threatened to impose a 25% universal levy on many items from the nation. In July, the two sides struck a deal to set both auto and across-the-board tariffs at 15%, but the deal hasn’t been fully implemented yet.

"Capital investment is currently positive, but companies will likely become more cautious going forward as the impact of Trump’s tariffs intensifies,” said Taro Saito, the head of economic research at NLI Research Institute. "Nonmanufacturing sectors are holding steady in terms of profits, but manufacturing, particularly the automotive sector, is deteriorating.”

Compared to the previous quarter, profits fell 10.9% for the manufacturing sector in the second quarter, while they only dropped 0.2% for the service sector.

Monday’s data will be used to revise the second quarter GDP report after the preliminary reading showed faster-than-expected growth. The economy has now expanded for five consecutive quarters. While the lower quarter-on-quarter capital expenditure gain reported Monday points to a possible downward revision for business spending, the data also offered mixed signals with a disparity between manufacturers ramping up investment while service sector businesses cut back on spending.

The tariffs are weighing on exporters, raising concerns that their profitability and capacity to raise wages could be compromised along the way. Exports sustained their steepest drop in more than four years in July, extending the streak of declines to three months. Some companies have borne much of the tariff burden, allowing profit margins to shrink in a bid to maintain market share.

A $550 billion investment mechanism, a key pillar in the Japan-U.S. trade deal, has raised some concerns at home that Japanese companies may focus on investing in the U.S. and leave their domestic operations behind.

The trade ministry is seeking a tax revision for the year that will start in April to encourage companies to make domestic investments. The aim is to improve their earnings and solidify a positive economic cycle, including wage growth, according to the ministry.

The Bank of Japan continues to monitor the impact of the tariffs on the economy as it considers whether to raise interest rates again this year. In its latest outlook report on July 31, the bank said "business fixed investment has been on a moderate increasing trend” while there has been some front-loading and a subsequent reactionary decline in exports and production, due to the U.S. tariffs. The bank is expected to hold rates at its next policy meeting Sept. 19.