While growth in the world’s third largest economy, Japan, surpassed expectations in the first quarter, expanding at its fastest pace in a year, an important pillar of growth was missing: revival in capital spending.
Japan’s economy grew 0.9 percent in the first quarter of 2013 from the previous three months – above forecasts for 0.7 percent growth – helped by robust consumption growth and a pick-up in exports.
However, the improvement in export demand has failed to translate into investment, with capital expenditure (capex) falling 0.7 percent – the fifth straight quarter of declines – compared with estimates for a rise of 0.7 percent.
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