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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.