Capital spending by Japanese companies increased in the January-March quarter from a year earlier, booking the fourth quarter of gains, as business spending on digital and green technology rose notably, the government said in a report on Wednesday. According to the Finance Ministry, capital spending by Japanese companies rose 3.0pc in the January-March quarter from a year earlier with investment by all non-financial sectors totalling 14.9t yen ($115.17b), in the reporting period. As for the manufacturing sector, capital expenditure grew 5.9pc, to mark the fourth successive quarter of gains, to a total of 4.9t yen. This was owing to increased spending in the transportation equipment industry as automakers spent more on digital technologies in twine with goals to meet the country’s target of carbon neutrality. In the non-manufacturing sector, meanwhile, business spending increased for a further straight quarter to 10.0t yen ($77.27b), an increase of 1.6pc, as a result of real estate businesses signing more contracts, with the promotion of digitalization being actively pushed by wholesalers and retailers planning to open new stores. “Business investments by manufacturers have largely recovered to the pre-pandemic level, while those by non-manufacturers remain weak,” a ministry official was quoted as saying. “The Japanese economy is picking up, although some businesses are still affected by the coronavirus pandemic fallout,” the official added. The government has pledged to achieve a carbon-neutral society by 2050, with numerous businesses and conglomerates becoming less reliant on fossil fuels in favour of renewables. “Environmental measures will continue to be one of the factors to ramp up business investments,” said the ministry official. The ministry said that companies’ pretax profits and sales of companies increased, owning in part to surging prices for fuel and commodities as a result of the Russia-Ukraine conflict. The ministry’s data showed that in the recording period, pretax profits climbed 13.7pc to 22.8t yen ($176.16b), helped by growth in the chemical industry, as higher costs for raw materials began to be passed on by petrochemical makers to their consumers and increase profits. Oil wholesalers also booked growth, in the recording period, the ministry said. Sales were up 7.9pc, the ministry said, expanding for the fourth straight quarter, to 360.8t yen ($2.78t), also lifted by chemical product makers and wholesalers.