Japan’s fourth quarter capital spending up 16.8%: Ministry of Finance

March 7, 2007
By Ken Worsley

The corporate-led economic expansion still looks strong: On Monday, the Ministry of Finance announced that capital investment by Japanese corporations (excluding finance and insurance) rose 16.8% in the fourth quarter of 2006. It was the fifteenth consecutive quarterly rise, and the strongest since the Ministry began tracking such data in 2002.

This data was stronger than what most observers expected and raises the possibility that the Cabinet Office may revise its GDP figure for the same quarter in an upward direction. On February 15, the Cabinet Office announced that Japan’s GDP has risen 1.2% in real terms (4.8% annualized) in the October-December quarter of 2006. The Cabinet Office’s revised GDP figures are due on March 12.

The Ministry of Finance stated that the increase in capital spending was led by small and medium sized firms, though some may question the methodology. The Ministry sent 24,587 polls to companies with over 10 million yen in capitalization that it had chosen at random, and replies were received from 19,319 of them.

Filed Under Business, Finance