Capital expenditure by Japanese companies rose sharply in the first quarter of 2025, climbing 6.4% year-on-year. This marks a strong rebound from the 0.2% decline recorded in the previous quarter and significantly surpasses market expectations for a 3.8% increase. The growth was broad-based, with both manufacturing and non-manufacturing sectors contributing to the upswing. Capital spending in the manufacturing sector rose by 4.2%, while the non-manufacturing sector posted a stronger gain of 7.6%.
Among individual industries, the largest increases were seen in petroleum and coal products (+33.3%), information and communications (+25.2%), iron and steel (+21.8%), transport and postal services (+19.3%), and food (+13.1%). The robust capital investment signals renewed corporate confidence and may support Japan's broader economic recovery momentum.