Spending by Japan's largest companies increased to a record first quarter, indicating that corporate sector strength is helping the world's second largest economy grow.
Capital spending rose 13.6 percent in the period ending March 31, according to a quarterly survey released Monday by the Japanâ€™s Ministry of Finance. Corporate sales and pre-tax profits were also new records.
While growth slowed from 16.8 percent in the fourth quarter, it was still above market forecasts of a 9.6 percent rise, easing worries that capital spending may be losing steam.
Construction companies, machinery makers and transportation equipment makers led the increase. Sales rose 6.3 percent and profit climbed 7.4 percent the report showed. Excluding spending on software, business investment rose 14.2 percent.
Corporate-sector strength has been the main driver of Japan's economic recovery. The country is currently experiencing the longest period of expansion since World War II.
The corporate growth suggests that the Bank of Japan is on track to raise interest rates, which pushed the Japanese government bond yield up to 1.8 percent.