Japanese Companies Cut Capital Spending Despite Strong Profits

First-quarter data signals economic contraction, raising concerns over persistent inflation and global uncertainties.

Capital expenditures fell 0.5% from the previous quarter, driven by a 3% decline in manufacturing investment.
Service-sector firms slightly increased their spending, contrasting with the overall trend.
Corporate profits surged 15.1% year-on-year, nearly double the consensus estimate.
Revised GDP figures expected to confirm a contraction in the economy for the first quarter.
The Bank of Japan faces challenges in balancing investment with inflation and economic stability.