Japanese corporate capital expenditure fell 0.2% year-on-year in the fourth quarter, marking the first decline in nearly four years, as global economic uncertainties and labour shortages constrained investment. While businesses remain committed to capital spending due to strong profits, investment in sectors like construction has been restricted by workforce constraints. The weaker-than-expected data, which will factor into revised GDP figures due March 11, may temper the Bank of Japan’s outlook on domestic demand-driven growth. Despite an annualised 2.8% economic expansion in Q4, concerns over US tariffs on key industries such as steel, autos, and semiconductors could dampen future investment. Japan aims to double corporate capital expenditure to JPY200tr (USD1.342tr) by 2040, following a record-breaking JPY100tr in the last fiscal year.