Japan Capex Likely to Remain Solid Despite BOJ Rate Hikes

Dow Jones
08/21

0544 GMT - Any negative impact from the Bank of Japan's interest rate hikes is more likely to materialize in corporate capital expenditure than in earnings, SMBC Nikko Securities economists say. However, real capital investment is currently heavily constrained by inflation, so easing yen weakness and slowing price growth should act as catalysts to boost spending, they note. Prime Minister Sanae Takaichi's large-scale investment package is also expected to stimulate private-sector commitment, they add. Considering these policy tailwinds, as well as cooling inflation, SMBC Nikko projects corporate capital expenditure to remain solid.

 

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