• SHARE

Capital spending in the January-March quarter rose 7.3 percent on year, chalking up an eighth consecutive expansion as the economy continues to recover, the government said Monday.

Business investment by all nonfinancial sectors for such purposes as building plants and installing new equipment totaled ¥13.13 trillion, the Finance Ministry said.

The data will affect the nation’s growth figures, with the Cabinet Office scheduled to release revisions to gross domestic product data for the same quarter on June 8.

On a quarterly basis, investment, excluding spending on software, increased a seasonally adjusted 5.8 percent from the October-December quarter, climbing for the third quarter straight, the ministry said.

Capital spending by manufacturers climbed 6.4 percent year on year to ¥4.3 trillion, marking the third consecutive quarterly increase, due mainly to corporate moves to boost production capacity for vehicles and smartphone parts.

Investment by nonmanufacturers posted a 7.8 percent gain to ¥8.7 trillion, up for the eighth straight quarter, led by the construction of distribution depots and hotel renovations, a ministry official said.

“The results reflect the trend of the economy as a whole, which continues to recover moderately,” the official added.

The data also showed pretax profits at businesses in all sectors covered by its poll rose 0.4 percent to ¥17.5 trillion, the second-highest since comparable data started being collected in 1954, breaking the record posted in the previous quarter.

A preliminary GDP report released May 20 said Japan’s economy grew an annualized real 2.4 percent in the quarter through March, marking the second straight quarterly expansion following the recession triggered by last year’s consumption tax hike.

In the GDP report, capital spending, which accounts for around 15 percent of GDP, rose 0.4 percent quarter on quarter.

Toru Suehiro, market economist at Mizuho Securities Co., said the GDP figure is likely to be revised upward, but that the high growth in corporate investment seen in the reporting quarter may be temporary, given that consumer spending is still weak.

Although the government says private consumption is showing signs of picking up since the first stage of the consumption tax hike last year, data released Friday showed average household spending in April unexpectedly fell 1.3 percent from a year earlier.

Domestic output is also expected to slow in the future, Suehiro said.

“Though some companies are resuming domestic production due to a weaker yen, the overall trend remains that companies are raising the ratio of overseas production” to meet demand abroad, he said.

In the January-March quarter, sales fell 0.5 percent from a year earlier to ¥343.60 trillion, partly in reaction to the surge in demand a year ago that preceded the April tax hike, the ministry said.

In the first quarter of 2015, the dollar jumped ¥16.34 from the previous year to ¥119.11 on an average basis, the official said.

A weak yen usually supports exports by making Japanese products cheaper abroad and boosting the value of overseas revenue in yen terms, improving profits and prompting firms to expand investment.