November 16, 2022

According to a Reuters monthly poll, the majority of Japanese businesses anticipate concentrating their capital spending on technology in the coming year.

The study confirms claims made by the Japanese government and central bank last month that the prognosis for capital expenditures is improving, despite continued general pessimism about the economy.

52% of the 495 companies surveyed stated they will concentrate capital investments on digitalization and information technology in the fiscal 2023 period. This tendency was especially noticeable among non-manufacturers.

The most often given response across all businesses was digitization, which was followed by labor-saving techniques and decarbonization. It was an improvement from January 2019, when 42% of businesses stated that technology will be a focus of investment.

Despite the inflationary and yen-weakening economic headwinds, 90% of businesses predicted that their spending would either remain the same or increase in fiscal 2022, according to 61% of businesses.

Last month, the yen hit a 32-year low versus the dollar, raising the price of imported inputs. Nevertheless, more than 90% of respondents claimed that the depreciation of the Japanese yen had no impact on their capital expenditure.

Companies over the short term continued to express a pessimistic outlook for business. In comparison to last month’s survey, which asked 79% of firms, 78% predicted that the situation would be “not so good” to “bad” by the end of the next three months.

Source: The Japan Times
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