FX.co ★ Japan’s Capital Expenditure Contraction Eases in Q2, Signals Mild Improvement in Investment Climate

Japan’s GDP capital expenditure contracted at a slower pace in the second quarter of 2026, suggesting a modest easing of weakness in corporate investment. Quarter-over-quarter, capital expenditure declined by 0.9%, compared with a 1.2% drop in the previous quarter.

Both readings are based on quarter-over-quarter comparisons, with the current figure reflecting the change in Q2 relative to Q1 2026, and the previous figure showing Q1’s change relative to Q4 of the prior period. While still in negative territory, the smaller decline in the latest data may indicate that the downturn in investment is stabilizing.

The updated figures, released on 7 September 2026, will be closely watched by markets and policymakers as they assess the resilience of Japan’s corporate sector and the broader outlook for economic growth in the second half of the year.