Major Japanese companies cut capital expenditure in Q1, Middle East turmoil drags down business confidence
- Due to the continued turmoil and increasing uncertainty in the Middle East, the business confidence of large Japanese companies has begun to decline, and capital expenditure shrank in the first quarter.
- According to data from the Japanese Ministry of Finance, capital expenditure excluding software fell by 3.5% quarter-on-quarter in the first quarter ending March. Meanwhile, preliminary GDP data for the same period showed a marginal increase of 0.3% in corporate investment quarter-on-quarter. By sector, non-manufacturing investment fell by 5.1% quarter-on-quarter, and manufacturing investment declined slightly by 0.3%.
- The Bank of Japan’s Tankan survey released on April 1 showed that the business conditions index for large manufacturers improved for the fourth consecutive quarter, but expectations for all industries declined. In early March this year, Iran responded to US-Israeli attacks with countermeasures, effectively cutting off shipping in the Strait of Hormuz, which triggered a sharp surge in international oil prices.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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