ANN/THE STRAITS TIMES – Japanese corporate spending on plant and equipment rose at a faster pace in the second quarter, keeping alive expectations of a domestic-led recovery in economic growth and supporting the case for more interest rate increases over coming months.
The solid expenditure data, which will be used to calculate revised gross domestic product figures due on September 9, comes on top of a factory survey showing a milder contraction in manufacturing activity in August.
Capital spending accelerated by 7.4 per cent year on year in the April to June quarter from the previous quarter’s rise of 6.8 per cent, Ministry of Finance data showed yesterday. It grew 1.2 per cent on a quarterly basis.
Capital expenditure is one of the key gauges of domestic demand-led economic growth, as policymakers are counting on business investment to be an engine for the world’s number four economy as exports struggle amid uncertainties around the United States (US) and Chinese economies.
