Wednesday, March 5, 2008

Japan Capital Spending Falls 7.3%; GDP May Be Lowered

Japanese business investment fell at the fastest pace in five years last quarter, signaling the government will trim its economic growth estimate next week.

Capital spending excluding software slid 7.3 percent in the three months ended Dec. 31 from a year earlier, the Ministry of Finance said today in Tokyo. The government will use today's report to revise its estimate of gross domestic product March 12. Preliminary fourth-quarter GDP grew an annualized 3.7 percent.

Profits, eroded by a stronger yen and higher costs of oil and raw materials, fell the most since the economy was emerging from a recession more than five years ago, today's report showed. Slower growth may prompt the Bank of Japan to cut interest rates, already the lowest among major economies, this year.

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