Japan’s capex plunges deeper on restricted business spending

Japanese companies reduced spending on plant and equipment for three consecutive quarters, which ended in the last quarter of 2020. Manufacturers heavily slashed costs, bringing in concerns about the strength of the country’s economic rebound as the coronavirus crisis ravaged private demand.

Capital spending recorded a 4.8% decline in the fourth quarter of 2020, data from the Ministry of Finance showed on Tuesday. The drop came to be the third quarterly decline as it saw a 10.6% contraction in the third quarter.

The country’s subdued capital expenditure might bring in worries for policymakers who eyed private-sector investment as a driver of recovery in the world’s third-largest economy. While there was a decline, separate data showed upbeat expectations for Japan’s job market in January.