FX.co ★ Japan Q1 Capital Spending Surges Past Expectations

In the first quarter of 2025, Japanese companies significantly increased their capital expenditures, registering a 6.4% rise compared to the same period the previous year. This increase represents a robust recovery from the 0.2% decline witnessed in the last quarter and far exceeds the anticipated 3.8% growth projected by market analysts. The expansion was widespread, with both the manufacturing and non-manufacturing sectors contributing to the positive trend. Investment in the manufacturing sector increased by 4.2%, while the non-manufacturing sector experienced a more substantial rise of 7.6%. Notably, industries such as petroleum and coal products saw a 33.3% jump, information and communications experienced a 25.2% increase, iron and steel grew by 21.8%, transport and postal services by 19.3%, and the food sector rose by 13.1%. This strong uptick in capital investment reflects a renewed confidence among corporations and could bolster the momentum of Japan’s wider economic recovery.