Japanese firms, buoyed by government stimulus and growing profits, will usher in their biggest annual capital spending increase since the 2008 global financial crisis, a survey showed Monday.
The leading Nikkei business daily said investments in plants, equipment and other capital spending by nearly 1,400 surveyed firms would total 25.9 trillion yen for the current fiscal year to March—up 13.1% from a year earlier.
The percentage rise would be the biggest annual gain after a 13.7% jump in fiscal 2005 and the best showing since the 2008 collapse of Lehman Brothers triggered a worldwide financial meltdown, the Nikkei said.
Spending on overseas plants and other investments by a subset of the polled group—about 840 firms—were on track to surge 33% to 4.2 trillion yen, it said.
The survey is a plus for Prime Minister Shinzo Abe’s bid to stoke the world’s third-largest economy with a policy blitz dubbed Abenomics.
Since Abe took office late last year, the yen has declined by about one-quarter on the dollar, boosting Japanese exporters and the Nikkei stock index, as the Bank of Japan (BOJ) launched an unprecedented monetary easing plan.
Abe has been calling on cash-rich firms to boost wages to stoke spending and growth. BOJ Governor Haruhiko Kuroda repeated Abe’s salary-hike call in a speech Monday.
“I am hoping that increases in basic salaries… will be carried out as corporate earnings grow,” he told business executives.
Separate finance ministry figures on Monday showed capital spending by Japanese corporations rose 1.5% on-year in the three months to September, but that growth was slower than in the previous three quarters.
The data may negatively affect Japan’s annualised GDP growth rate of 1.9% in the quarter when revised figures are published later this month, Dow Jones Newswires reported.