According to data released by Ministry of Finance, business investment in Japan has been on the rise in Q1 2019. Capital expenditure rose by 6.1% in Q1 2019 when compared with Q1 2018 and up 5.7% since Q4 2018.
Chemicals, production machinery and leasing of goods were the key sectors that drove this gain. However, looking at the data, some economists expect a downward revision in Q1 2019 GDP growth which is due to be released on June 10. According to preliminary estimates, the GDP growth in Q1 2019 is expected to be 2.1% for this period over falling imports vis-à-vis exports.
Corporate recurring profits during Q1 2019 have also increased by 10.3% YoY, beating the previous quarter when they declined 7.0%. Corporate sales have also been up 3% YoY during this period, for a tenth consecutive quarter.
If the GDP figures are revised downward, there is a high likelihood that PM Shinzo Abe could delay the proposed sales tax hike due to come into effect from October 2019.