Japanese capital investment rose at a slower pace & corporate profits fell for the first time in four years: Mar 1, 2016

Intra-Day Market Moving News and Views (USD/JPY) 
01 Mar 2016 01:15GMT

USD/JPY - .....Earlier Japanese Finance Minister Taro Aso said that the central bank's negative interest rate policy was already having positive effects after its adoption in late January and is currently not considering to compile additional fiscal spending to prop up the economy given that the budget for next fiscal year had not yet cleared parliament. 
Data out by the Ministry of Finance, the Japanese capital investment rose at a slower pace in October-December and corporate profits fell for the first time in four years in a worrying sign that flagging business spending will weigh on economic growth. The data suggests that revised gross domestic product (GDP) due on March 8 may show Japan's economy contracted more than first reported, adding to the sense of pessimism surrounding the strength of domestic demand. 

Japan's robust employment pattern continued, however, with seasonally adjusted unemployment falling in January to 3.2 percent, versus the median estimate for 3.3 percent. The jobs to applicants ratio rose to a 24-year high of 1.28, versus the median forecast of 1.27. 

Separate data showed household spending fell more than expected in January, providing further evidence that uncertainty about the economy may be behind consumers cutting expenditure. 
Decelerating capital investment and corporate profits are a worrying sign that the government may need to respond with more stimulus measures to prevent business and household activity from weakening further. 

A preliminary estimate showed the economy contracted an annualised 1.4 percent in October-December as consumer spending and exports slumped. The 8.5 percent annual increase in capital expenditure in October-December was slower than an 11.2 percent annual gain in July-September. 
Japan's household spending fell an annual 3.1 percent in January, more than the median estimate for a 2.7 percent year-on-year decline. 

Japan's economy is expected to return to growth in the current quarter, but there are persistent doubts about the outlook. Economists say the government's reforms have not done enough to raise the potential growth rate.