Capital spending by major Japanese companies is expected to grow at its fastest pace in 24 years in fiscal 2014, up 15.1 percent from the previous year to 17.71 trillion yen, a survey showed Tuesday.
The survey, released by the government-backed Development Bank of Japan, suggested companies are still willing to boost their investment, with the weaker yen and a recovery in private spending improving corporate profits even after the April 1 consumption tax hike.
Among projections released in summer every year, the 15.1 percent rise is the sharpest since a 17.0 percent increase in fiscal 1990, when Japan's economy rapidly expanded on the back of the so-called asset-inflated "bubble economy."
If capital spending grows as expected, it would by the third straight year of expansion.
Both manufacturing and nonmanufacturing companies plan to bolster investment spending over the year to March 2015, the bank said, based on its survey in June of 2,246 companies capitalized at 1 billion yen or more.
Manufacturers intend to raise capital spending by 18.5 percent from the previous year, while nonmanufacturing companies plan to increase it by 13.2 percent, the bank said.
The bank added 86.6 percent of the large firms answered they "did not take into account" the impact of the 3-percentage-point consumption tax hike to 8 percent when considering how fast they will increase or reduce their investment this fiscal year.
The latest projection, however, may be downgraded, depending on the future course of private spending and exports after this summer.