Japanese companies' capital spending rises as recovery gathers momentum

According to The Nikkei Asian Review, Japanese companies raised their spending on plant and equipment in January-March, underscoring a nascent pickup in the business investment needed for sustainable economic recovery and a decisive end to deflation.
Ministry of Finance (MOF) data issued on Thursday showed companies raised capital expenditure in January-March by 4.5 percent from the same period last year.
It marked a second straight quarter of annual growth in capital expenditure after expansion of 3.8 percent in the previous quarter.
But excluding software, capital expenditure grew 1.3 percent from the previous quarter on a seasonally-adjusted basis, rising for three quarters in a row and following a 3.5 percent gain in the previous period, the MOF data showed.
The data will be used to calculate revised gross domestic product due on June 8 at 0850 JST (2350 GMT June 7). It follows a preliminary estimate that Japan's economy grew an annualised 2.2 percent on the back of rising global demand.
A recent run of indicators points to continued economic expansion in the current quarter, with exports and factory output rising and a labour market tightening, although wage growth and household spending are still sluggish.
By sector, the MOF capex data showed capital expenditure by manufacturers and non-manufacturers grew 1.0 percent and 6.3 percent respectively in the first quarter from a year earlier.
Corporate profits rose 26.6 percent in January-March from a year earlier, up for a third consecutive quarter. The amount of recurring profits, at 20.1 trillion yen (US$181.20 billion), was the biggest on record for a January-March quarter, an MOF official said.

Ref:http://asia.nikkei.com/Politics-Economy/Economy/Japanese-companies-capital-spending-rises-as-recovery-gathers-momentum

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