Japanese companies increased spending on plant and equipment for a fifth straight quarter in the April-June period as business sentiment remained resilient despite rising costs, China's COVID-19 lockdowns and supply chain disruptions.
Robust corporate spending is offering some encouragement for Japan's growth outlook even as a global economic slowdown and domestic COVID-19 flare-ups threaten to weigh on near-term demand.
"While the level of capital expenditure is not overly strong compared to pre-pandemic times, companies finally started to boost spending that were kept during the past two years, thanks to an eased COVID-19 situation," said Takeshi Minami, chief economist at Norinchukin Research Institute.