JAPAN’S fall into recession between July-September could turn out to be less severe than feared, with new capital expenditure figures out yesterday suggesting revisions will put the third quarter in a slightly more positive light.

    The 5.5 percent year-on-year rise in capital expenditure over the third quarter reported yesterday followed a 3 percent annual increase in April-June, which could ease concerns about recovery from a sales tax increase earlier this year.

    “The revised data will show a smaller contraction in GDP that could be close to zero,” said Hiroaki Muto, senior economist at Sumitomo Mitsui Asset Management Co.

    Japan’s economy still contracted in the third quarter, following a decline in the second quarter and confirming a recession. But rising business investment means the contraction was not as severe as initially estimated.

    Compared with the previous quarter, capital spending excluding software rose a seasonally adjusted 3.1 percent, versus a 1.5 percent decline in April-June in an encouraging sign of vigorous business investment.(SD-Agencies)