(Bloomberg) -- Japanese businesses ramped up investment in the final quarter of 2023, an indication that firms were more bullish than indicated in overall growth figures for the period released last month.

Capital expenditures on goods excluding software rose 8% in the three months through December compared with the previous quarter, the finance ministry reported Monday. From a year earlier, the outlays gained 11.7%.

The yen edged higher as the Nikkei 225 stock average broke above 40,000 for the first time.

“Business investment finally showed robustness,” said Taro Saito, head of economic research at NLI Research Institute. “There was concern over a strange gap between their plans and actual investment, but these data are likely to ease those worries. The BOJ must be heaving a sigh of relief.”

The data will be factored into revised gross domestic product figures for the period, which are due on March 11. The initial reading showed GDP unexpectedly shrank at an annualized pace of 0.4%, tipping the economy into a technical recession. 

The latest data will probably lead to an upward revision in the GDP numbers, according to Kazuma Kishikawa, economist at Daiwa Institute of Research.

“I think there will be positive changes,” Kishikawa said. “There’s a possibility that the overall GDP figure could be revised to show growth.”

In the preliminary fourth-quarter GDP report, capital spending declined by 0.4% in real terms on an annualized basis to record the third consecutive quarterly fall. That finding showed there’s a discrepancy with the BOJ’s Tankan survey results, which indicated large companies were planning to increase spending this fiscal year by 13.5%.

Monday’s figures come as the Bank of Japan has repeatedly signaled it’s getting closer to conducting Japan’s first rate hike since 2007. Governor Kazuo Ueda Thursday pledged to closely watch the economy after spending by businesses and consumers has shown signs of weakness.

Corporate profits rose 13% from a year earlier, weaker than the consensus estimate of 21% but higher for a fourth straight quarter. With annual wage negotiations underway, authorities are watching for signs corporations are committing to channeling more profits into the pockets of workers, a development that might trigger a virtuous wage-price cycle.

“Corporate profits remain at a high level,” Saito said. “That shows businesses have room to raise wages and we can expect solid results from spring wage talks.”

The indications of resilience in the corporate sector will probably bolster bets on the BOJ making the move this month or next.

Read more: Japan to Consider Calling Official End to Deflation, Kyodo Says

Labor shortages and concerns over supply chain integrity could help support investment in coming periods, the BOJ said in its quarterly outlook in January.   

“Given the very strong plans for business investment, it will materialize at some point,” Ueda told reporters Thursday in Sao Paulo after meeting with his G-20 counterparts. “Japan’s economy is recovering gradually.”

(Adds details economists’ comments)

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