Capital spending by nonfinancial Japanese companies rose 3.0 percent in the April-June period from a year earlier, indicating that the first consumption tax hike in 17 years has not significantly affected corporate investment, the government said Monday.
Business investment by all nonfinancial sectors for purposes such as building factories and purchasing equipment rose for the fifth straight quarter in the three months through June to ¥8.56 trillion, the Finance Ministry said.
Overall business investment, excluding spending on software, fell a seasonally adjusted 1.8 percent from the January-March period, down for the first time in three quarters, the ministry said.
Capital spending by manufacturers dropped for the first time in three quarters, down 0.8 percent on year to ¥2.83 trillion, while nonmanufacturers posted a 5.0 percent rise to ¥5.73 trillion, up for the fifth consecutive quarter.
The data will affect Japan’s economic growth figures, with the Cabinet Office scheduled to release revised gross domestic product data for the period on Sept. 8.
By sector, the real estate industry increased its investment to develop commercial facilities and office buildings, while the entertainment sector beefed up spending related to amusement parks, a Finance Ministry official said.
A preliminary GDP report released Aug. 13 showed that the economy plunged an annualized real 6.8 percent in the April-June quarter, its fastest rate of decline since the devastating March 2011 disasters, hurt by the consumption tax hike to 8 percent on April 1.
According to the preliminary GDP report, capital spending — which accounts for around 15 percent of Japan’s GDP — dropped 2.5 percent on quarter.
During the second quarter of this year, the yen slid 3.38 to reach 102.14 against the dollar from the year before on an average basis, the official said.
A falling yen usually supports exports by making Japanese products cheaper abroad and boosts the value of overseas revenue in yen terms, helping improve corporate profits and prompt firms to bolster their investment.