TOKYO: Japanese firms increased spending on plant and equipment for the third consecutive quarter from October to December, as corporate sentiment got a boost from falling coronavirus cases and helped lift broader economic activity.

       A solid recovery of business expenditures is likely to ease worries for policymakers who are facing pressure to bolster the country’s economic recovery as the Ukraine crisis threatens to hurt the global economy.

       Finance Ministry data out yesterday showed capital expenditure (capex) in the final quarter of last year rose 4.3% from the same period last year, marking the third straight quarter of year-on-year gains.

       That was stronger than a 1.2% increase compared to a year earlier in the third quarter.

       The data, which will be used to calculate revised gross domestic products (GDP) due next Wednesday, comes after factory output posted a surprisingly large drop in January as the auto sector dealt with pandemic-induced production suspensions and parts supply shortages.

       After shrinking in the July to September period, the world’s third-largest economy returned to growth in the final three months of last year on a rebound in consumption, growing an annualised 5.4% on a preliminary basis.

       But that was before the Ukraine crisis erupted and the Omicron variant of the coronavirus drove a record surge in infections at home.

       Yesterday’s data showed manufacturers’ business spending improved 5.1% from a year earlier, while that of service-sector firms advanced 3.8%.

       Capex gained 3.4% in the October to December quarter from the previous quarter on a seasonally-adjusted basis, the Finance Ministry data showed.

       Corporate recurring profits rose 24.7% in the October to December quarter from a year earlier, while sales were up 5.7%. — Reuters