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Japan's capital spending rises 5.0% in July-Sept. period

12-02-2010 16:17 BJT

TOKYO, Dec. 2 (Xinhua) -- Japanese firms increased capital spending in the July-September period by 5.0 percent from a year earlier, marking the first annual gain since 2007, the Ministry of Finance said in a report on Thursday.

Spending by all Japanese industries during the recording period totaled 9.56 trillion yen (113.5 billion U.S. dollars), with spending on plant and equipment by manufacturers gaining 9.1 percent and investments by non-manufacturers increasing 2.9 percent, according to the ministry.

Although the July-September figure will likely affect the country's revised gross domestic product data due in early December, falling domestic and foreign demand may inhibit further increases in spending, analysts said.

"Capital spending is on a gradual recovery track as companies have ample cash on hand,"said Naoki Tsuchiyama, a market economist at Mizuho Securities Co.

"Still, demand at home is struggling to recover, so domestic investment will be limited to replenishing depreciated assets and companies may end up shifting production abroad," said the economist.

Editor:Du Xiaodan |Source: Xinhua

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