Japanese corporate capital expenditure jumped in April-June by its most since 2006, raising hopes for sustainable economic recovery led by the private sector, although global trade tensions cloud the outlook for an export-reliant economy.
Ministry of Finance (MOF) data out on Monday showed capital expenditure in the second quarter rose 12.8 percent from the same period last year, led by investment in the production of cars and electronic components.
It marked a seventh straight quarter of annual growth in capital expenditure after posting 3.4 percent gain in the previous quarter. It was the sharpest annual gain since 2006.
MOF capex data, which will be used to update gross domestic product (GDP) figures for the second quarter due out Sept. 10, points to upward revision to growth estimate, analysts say.
Capital expenditure has been a bright spot in Japan's economy, the world's third largest, as companies update their fixed assets and invest in automation and labour-saving technology to cope with labour shortages.