(RTTNews) - Japanese businesses lowered their spending on investment during the second quarter in view of the lingering impact of the recent earthquake and rising concerns over slowing global growth.
Capital spending on plant and machinery amounted to at JPY 7.714 trillion, 7.8 percent lower than the second quarter of last year, the Ministry of Finance said Friday.
This is against expectations for an increase of 1 percent on year following a downwardly revised 3 percent increase in the first quarter. This is the first decline in four quarters.
Excluding software, capital spending plummeted an annual 8.2 percent during the period, again missing forecasts for an increase of 0.7 percent. This followed the downwardly revised 3.4 percent gain in the previous three months.
Capital spending in manufacturing slipped 2 percent annually after surging 23.9 percent in the first quarter, while non-manufacturing capital spending declined 10.7 percent following a 5.7 percent fall three months earlier.
Japanese manufacturers are facing tough times both domestically and globally. Manufacturers were the most hurt by the recent earthquake and tsunami that destroyed production facilities and caused power outages.
Japanese policymakers have recently expressed concerns over the manufacturers' plans to shift their production facilities overseas.
Meanwhile, growth slowdown in Europe and the U.S., Japan's two key markets, is dampening demand, hurting Japan's exports. Exporters were also facing the adverse impact of strong yen. Despite interventions by the Finance Ministry and additional monetary easing by the Bank of Japan, the currency remains still strong.
Last month, the government announced more measures in response to the rapid appreciation of the yen, including a $100 billion emergency credit facility to assist companies investing overseas.
On an annual basis, industrial production in Japan declined 2.8 percent, but gained 0.6 percent from the previous month. The Nomura/JMMA Purchasing Managers' Index, a measure of the health of the manufacturing industry, declined slightly to 51.9 in August from 52.1 in July, though still in an expansion mode.
Japanese automobile production decreased 8.9 percent from a year ago in July to 790,325 units, according to figures released by the Japan Automobile Manufacturers Association on Wednesday.
Japan's new Prime Minister Yoshihiko Noda has reportedly picked Jun Azumi, a former head of parliamentary affairs, as the country's new Finance Minister, on Friday. Meanwhile, reports said that Yoshio Hachiro will become Japan's new Trade Minister.
Read more news at forex trader
No comments:
Post a Comment