Overview
- Corporate capital spending on plants and equipment rose 6.4% year-on-year to 18.8 trillion yen in the first quarter.
- Food sector outlays climbed 13%, and real estate investment increased 11% as firms responded to strong domestic demand.
- Export-focused industries cut spending, with auto sector capex down 1.4% and factory equipment investment falling 4.1% as firms cite U.S. tariff uncertainty.
- Japan’s GDP shrank an annualized 0.7% in Q1 due to stagnant private consumption and declining exports.
- Analysts warn threatened U.S. tariffs could reduce exports by up to 6 trillion yen annually and trim corporate profits by as much as 25%, threatening wage growth.