Thursday 3 December 2009


JAPAN’S COMPANIES CUT CAPITAL SPENDING AT RECORD PACE

Keiko Ujikane

Bloomberg, December 3, 2009

Japanese businesses cut spending at a record pace last quarter, indicating they aren’t yet confident that the recovery from the country’s deepest postwar recession will be sustained.

Capital spending excluding software fell 25.7 percent in the three months ended Sept. 30 from a year earlier, the largest drop since the government began the survey in 1955, the Finance Ministry said today in Tokyo. It was the 10th decline.

The report adds to concerns about an economy that’s already under threat from deflation and the yen’s gain to a 14- year high against the dollar, which is eroding earnings at exporters such as Toyota Motor Corp. The Bank of Japan this week unveiled a 10 trillion yen ($115 billion) credit program, and the government plans to release a spending package to fight price declines and the surging currency.

“It will probably take time before capital investment returns to a sustainable recovery track,” said Naoki Tsuchiyama, market economist at Mizuho Securities Co. in Tokyo. “Concern over a stronger yen and deflation may affect corporate investment with a time lag.”

The Cabinet Office will use today’s report to revise third-quarter gross domestic product figures on Dec. 9. Tsuchiyama said annualized growth may be revised down to about 2.5 percent from the government’s initial figure of 4.8 percent, which was the fastest pace since the start of 2007.

(...) [artículo aquí]

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