MARKETS & FX
Rate Hikes Can't Stop It: Japan Big-Firm Capex Up 12.6 Percent on Labor ShortageA · FULL TRANSLATION
# Japan capex# labor shortage# automation investment# corporate spending# BOJ
Key Points
- Large-firm capex plans rose 12.6% despite rising rates
- Labor shortage is forcing a generational equipment upgrade
- Automation and software investment lead the surge
Analysis
Japanese large firms plan capex growth of 12.6% even as borrowing costs rise — because the labor shortage leaves no choice. This is replacement-cycle investment of a generational kind: automation, software and labor-saving equipment that pays for itself in unfilled positions. The implication for the BOJ is notable: structurally motivated capex is rate-insensitive, giving tightening more room than textbook models suggest.
