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Q1 Capex Beat May See Q1 GDP Revised Higher

JAPAN DATA

Japan's Q1 capital spending came in stronger than expected, rising 11% y/y, versus 6.0% expected and 7.7% prior. The y/y pace is now back close too mid 2018 highs. Ex Software spending rose by 10.0%y/y, also above expectations of 3.7% (prior 6.3%). In q/q terms this figure was up 2.7%, which was stronger than the result implied by the initial Q1 GDP figures.

  • The results may see some upward revisions to Q1 GDP and are consistent with Tankan results showing firms looking to invest more. The authorities will be hoping higher investment spending drives broader growth outcomes further into 2023.
  • Other data showed company profits at 4.3% y/y, also above expectations of 0.9%, while sales were close to estimates, printing at 5.0% y/y (5.3% forecast).

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