Japanese companies cut capital investment

In the first quarter of 2009 Japanese companies cut their capital investment at the fastest pace in the last 54 years, a governmental survey says. The 25% decline from the same period in 2008 on plant and equipment followed a 17% fall from October to December last year, announced the survey by Japan's finance ministry that was released Thursday in Tokyo. Japan has been one of the major economies worst hit by the global downturn; export firms have been particularly affected by the drop in worldwide consumer spending. The Japanese gross domestic product (GDP) contracted by a record annual rate of 15% during the January-March quarter of 2009. Japan's Finance Minister Kaoru Yosano said Wednesday that the country's economy will probably begin growing again this quarter, echoing a prediction made last month by Bank of Japan Governor Masaaki Shirakawa. A growth of 1.6% in industrial output -- the first gain in six months -- led economists to predict a modest growth for the world's second largest economy in the coming months. Analysts are also optimistic about Prime Minster Taro Aso's $160B stimulus plan to boost consumption, which accounts for about 55% of Japan's GDP.