(Adds economist’s quote, details)
* Q4 capex +7.6 pct yr/yr vs f‘cast -6.5 pct
* Sales -1.3 pct yr/yr, recurring profits -10.3 pct yr/yr
* Analysts say Q4 GDP may be revised to show growth
By Kaori Kaneko
TOKYO, March 1 (Reuters) - Japanese companies unexpectedly raised expenditure in October-December from a year earlier, an encouraging sign for demand as the country rebuilds from last year’s devastating earthquake and could mean that fourth-quarter GDP is revised to a positive figure.
The 7.6 annual increase in Japanese companies’ capital spending was better than the median estimate for a 6.5 percent annual decline and follows a 9.8 percent annual decline in the third quarter of last year.
“Reconstruction demand likely supported capital spending in the fourth quarter after rubble from the March earthquake was mostly cleaned up by September, although spending among exporting firms likely fared poorly due to the yen’s strength,” said Yuichi Kodama, economist at Meiji Yasuda Life Insurance.
“October-December GDP is likely to be revised up sharply, probably to a positive figure.”
Japan’s economy is on track to gradually recover this year as overseas economies pick up and the country rebuilds towns along its earthquake-damaged northeast coast and the capital expenditure data may help the government as it tries to win support for its fiscal policy.
The data will be used to calculate revised gross domestic product figures due on March 8. A preliminary estimate showed GDP contracted 0.6 percent in October-December as flooding in Thailand, a strong yen and weak demand hurt exports.
Firms’ sales fell 1.3 percent in the fourth quarter from a year earlier, after a 1.9 percent annual decline in the third quarter.
Recurring profits fell 10.3 percent from a year earlier after an 8.5 percent annual decrease in July-September, the data showed. (Editing by Edwina Gibbs)