Despite 19 Japanese Firm Increased Q1 Capital Spending by 6.4% In the first quarter of 2025, Japanese firms increased capital spending by 6.4% year-on-year, reaching a record ¥18.8 trillion ($130 billion), driven by robust domestic demand in sectors like food and real estate. However, export-oriented industries such as automobiles and factory equipment saw declines in investment, attributed to concerns over U.S. tariffs introduced by President Trump’s administration. While corporate profits and sales rose, the looming threat of tariffs poses risks to future earnings and wage growth, potentially impacting the Bank of Japan’s economic projections and plans for interest rate adjustments. Learn more at Reuters. Uptick in M&A Transactions In 2024, Japan experienced a significant uptick in mergers and acquisitions (M&A), with a total of 4,700 deals—marking a 17.1% increase from the previous year. This growth was evident across all three market categories: domestic (IN-IN), inbound (OUT-IN), and outbound (IN-OUT). The overall value of these transactions rose by 8%, partly due to several large-scale deals, including Nippon Life Insurance Company’s USD 8.2 billion acquisition of U.S.-based Resolution Life. Notably, outbound M&A activities between Japan and ASEAN countries were particularly robust, with Singapore and Vietnam emerging as key destinations. In the first quarter of 2025, Japanese companies continued this momentum, executing 1,171 M&A deals valued at USD 50.2 billion—a 67.4% increase in value compared to the same period in 2024. This data is sourced from RECOF Corporation, a Tokyo-based M&A advisory firm specializing in cross-border transactions, particularly between Japan and Southeast Asia. Learn more at RECOF. Japan To Expand Investments in Africa Japan is intensifying efforts to expand its investments in Africa, aiming to reduce its economic dependence on China. This strategic shift is driven by Japan’s emergence from a prolonged period of deflation, which has revitalized the private sector’s willingness to engage in overseas ventures. Takehiko Matsuo, vice-minister for International Affairs at the Ministry of Economy, Trade and Industry, highlighted this renewed commitment during a visit to Abidjan, Ivory Coast, emphasizing Japan’s intent to transition from being primarily a donor to becoming a proactive business partner across the African continent. Learn more in Japan Times here.
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