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MNI BRIEF: BOJ Hopes For Upward Capex Revision in June Tankan

TOKYO (MNI)

BOJ officials looking for signs of upward revision to capex plans in June Tankan survey to underline virtuous cycle outlook.

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Bank of Japan economists await the upcoming June Tankan to gauge whether capital investment plans are revised revised up from March, as normally happens, to gauge whether a virtuous cycle is still in place in the corporate sector, MNI understands. Capex plans by major firms are expected to rise 3.0% this fiscal year, above the historical average.

If capex plans aren't revised higher, it will undermine the BOJ's baseline scenario, concerning bank officials that the could be a pause or a reversal to the virtuous cycle from income to spending.

However, overall bank officials expect capex to kick off a fresh cycle of growth, supported by improved corporate profits, accommodative financial conditions and an expected pick up in GDP growth rates.