People wearing face masks to protect against the spread of the coronavirus walk on a street in Tokyo on Aug. 31, 2021. (AP Photo/Koji Sasahara)

       TOKYO (Kyodo) -- Capital spending by Japanese companies rose 5.3 percent in the April-June quarter from a year earlier, the first increase in five quarters, rebounding from last year's sharp fall caused by the coronavirus pandemic, government data showed Wednesday.

       Investment by all nonfinancial sectors for purposes such as building factories and adding equipment totaled 10.15 trillion yen ($92 billion), marking the fastest growth since a 7.1 percent gain logged in July-September of 2019, the Finance Ministry said.

       Capital expenditure by manufacturers grew 4.0 percent to 3.40 trillion yen, as telecommunication equipment makers spent more to strengthen their production capacity for items such as semiconductors amid a global chip shortage.

       In the nonmanufacturing sector, investment gained 5.9 percent to 6.75 trillion yen. Spending from the services and construction sectors expanded over 30 percent to lead the increase.

       Seasonally adjusted capital expenditure by all nonfinancial sectors, including spending on software, rose 3.2 percent from the first quarter of 2021, up for the second straight quarter.

       "Manufacturers have increased their appetite for investment since they had postponed capital spending due to the pandemic in fiscal 2020" through March, said Takeshi Minami, chief economist at the Norinchukin Research Institute.

       Minami added that firms' willingness to invest was also stimulated by an accelerated recovery of demand in U.S. and European economies on the back of progress in vaccine rollouts.

       Taking into account the latest capital spending figures, the Cabinet Office is scheduled to release revised gross domestic product data for the same quarter on Sept. 8.

       Preliminary data showed the country's economy grew an annualized real 1.3 percent in the three-month period, the first expansion in two quarters, despite sluggish consumption under the third virus emergency.

       Minami forecasts the April-June GDP growth rate will be revised upward to an annualized 2.2 percent, as growth in the business investment component is expected to be upgraded from 1.7 percent to 2.9 percent.

       Pretax profits of domestic companies covered in the survey rose 93.9 percent from the previous year to 24.07 trillion yen from a year earlier, up for the second straight quarter to post the steepest increase since a 163.8 percent jump marked in January-March 2010 when the economy was recovering from the global financial crisis.

       Sales rose 10.4 percent to 314.41 trillion yen, up for the first time in eight quarters. Sales by manufacturers and nonmanufacturers were up 20.1 percent and 6.8 percent, respectively.

       The ministry surveyed 32,798 companies capitalized at 10 million yen or more, of which 22,565, or 68.8 percent, responded.

       The ministry's corporate survey data for fiscal 2020 through March, also released Wednesday, showed Japanese companies' retained earnings totaled 484.36 trillion yen, up 2.0 percent from fiscal 2019 to hit a record high for the ninth straight year.

       Meanwhile, their annual sales, pretax profits and business investment declined 8.1 percent, 12.0 percent and 5.0 percent, respectively, underscoring Japanese firms' tendency to give priority to hoarding funds to prepare for future crises.

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