Free Trial

Q2 Capex Falls, Weaker Than Initial Estimates, Q2 Profits Better Than Forecast

JAPAN DATA

Japan's Q2 capex and company profits data were mixed relative to expectations. On the capex side we surprised on the downside, spending in y/y terms at 4.5%, nearly half the 8.3% consensus, while the prior was 11.0%. Ex software capex spending also disappointed, printing 4.4% y/y, versus 7.5% forecast and 10.0% prior. Profits were better, +11.6% y/y, versus -0.1% forecast and 4.3% prior. Company sales were 5.8% y/y, versus 4.3% forecast and 5.0% prior.

  • In terms of the Capex details, we fell 1.2% in q/q terms, while ex software this fall was a little larger at -1.6%. These are the first falls since Q1 2022 and contrast with the initial Q2 GDP report, which showed flat q/q business spending.
  • Weakness was concentrated in the non-manufacturing sectors, -2.5% q/q, with manufacturing capex +1.2% q/q. The y/y capex pace is back to mid 2022 levels.
  • On the profits side, strength was evident for both manufacturing (12.5% q/q) and non-manufacturing (8.0%q/q). On the sales side, strength was more evident for manufacturing (+4.5% q/q), versus non-manufacturing (0.3%q/q).

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.