Japan companies raise April-June capital spending 1.6% year-on-year

  • Japanese companies raised April-June capital investment 1.6% to ¥13.025 trillion, extending growth to a sixth consecutive quarter.
  • Fiscal 2025 operating profit reached a record ¥124.8313 trillion, while capital investment rose 4.3% to ¥57.8999 trillion.
  • The labor share fell to 63.0%, its lowest level since fiscal 1973, as personnel expenses lagged profit growth.

Japanese companies outside finance and insurance increased April-June capital investment 1.6% year-on-year to ¥13.025 trillion, marking a sixth consecutive quarterly rise, while operating profit surged 24.6% to ¥44.6668 trillion. In fiscal 2025, operating profit reached a record ¥124.8313 trillion, revenue rose 1.6% to ¥1,720.256 trillion and capital investment increased 4.3% to ¥57.8999 trillion, but the labor share fell to 63.0%, its lowest level since fiscal 1973. Manufacturing investment declined 3.7% in the quarter while non-manufacturing investment rose 4.7%. The data will feed Japan’s second preliminary, or revised, April-June GDP estimate due from the Cabinet Office on September 8, with the outlook for wages and household consumption remaining a key test for the economy.

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