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Capital spending by Japanese companies rose 5.3% in the April-June quarter from a year earlier, the first increase in five quarters, rebounding from last year’s sharp fall caused by the COVID-19 pandemic, government data showed Wednesday.

Investment by all nonfinancial sectors for purposes such as building factories and adding equipment totaled ¥10.15 trillion ($92 billion), marking the fastest growth since a 7.1% gain logged in July-September 2019, the Finance Ministry said.

Capital expenditure by manufacturers grew 4.0% to ¥3.40 trillion, as telecommunication equipment makers spent more to strengthen their production capacity for items such as semiconductors amid a global chip shortage.

In the nonmanufacturing sector, investment gained 5.9% to reach ¥6.75 trillion. Spending from the services and construction sectors expanded over 30% to lead the increase.

Seasonally adjusted capital expenditure by all nonfinancial sectors, including spending on software, rose 3.2% from the first quarter of 2021, up for the second straight quarter.

“Manufacturers have increased their appetite for investment since they had postponed capital spending due to the pandemic in fiscal 2020,” which ran through March, said Takeshi Minami, chief economist at the Norinchukin Research Institute.

Minami added that firms’ willingness to invest was also stimulated by an accelerated recovery of demand in U.S. and European economies on the back of progress in vaccine rollouts.

Taking into account the latest capital spending figures, the Cabinet Office is scheduled to release revised gross domestic product data for the same quarter on Sept. 8.

Preliminary data showed the country’s economy grew an annualized real 1.3% in the three-month period, the first expansion in two quarters, despite sluggish consumption under the third virus emergency.

Minami forecasts the April-June GDP growth rate will be revised upward to an annualized 2.2%, as growth in the business investment component is expected to be upgraded from 1.7% to 2.9%.

Pretax profits of domestic companies covered in the survey rose 93.9% from the previous year to ¥24.07 trillion, up for the second straight quarter to post the steepest increase since a 163.8% jump marked in January-March 2010 — when the economy was recovering from the global financial crisis.

Sales rose 10.4% to ¥314.41 trillion, up for the first time in eight quarters. Sales by manufacturers and nonmanufacturers were up 20.1% and 6.8%, respectively.

The ministry surveyed 32,798 companies capitalized at ¥10 million or more, of which 22,565, or 68.8%, responded.

The ministry’s corporate survey data for fiscal 2020, which ran through March, was also released Wednesday and showed Japanese companies’ retained earnings totaled ¥484.36 trillion — up 2.0% from fiscal 2019 to hit a record high for the ninth straight year.

Their annual sales, pretax profits and business investment declined 8.1%, 12.0% and 5.0%, respectively, underscoring the tendency among Japanese firms to prioritize hoarding funds to prepare for future crises.

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