Japan Company Capital Spending Q3 2007 and Japanese Wages in October

Japan's companies cut spending for a second quarter between July and September according to data from the Finance Ministry today. Capital spending fell 1.2 percent in the three months ended 30 Sept 2007 (when compared with Q3 2006) after a 4.9 percent year on year drop in the previous quarter.



Profit at the 24,000 companies surveyed fell for the first time in five years, giving them less cash to invest in equipment and personnel in coming months. At the same time Japanese wages failed to rise in October, as measured by average monthly total cash earnings according to the provisional Monthly Labour Survey released today (they were unchanged year on year) giving a further sign that domestic consumers may be unable to pick up the slack left by falling exports to the U.S. - still (despite considerable diversification) Japan's biggest overseas market.