By Tetsushi Kajimoto

TOKYO (Reuters) – Capital expenditure growth in Japan sped up in May, a Reuters poll of 18 economists showed, a glimmer of hope that solid exports may help boost private-sector investment for a post-pandemic growth.

Cabinet Office data due at 8:50 a.m. Monday (2350 GMT Sunday) will likely show core machinery orders, a highly volatile data series regarded as a leading indicator of capital spending in the coming six to nine months, grew 2.6% in May.

It would mark a third straight month of increase, accelerating from the previous month’s 0.6% gain.

Compared with a year earlier, core orders, which exclude those of ships and electricity utilities, likely grew 6.3% in May, following a 6.5% growth in the previous month.

“Restrictions on people’s movement have eased in those countries that have proceeded with vaccinations, raising the prospects for economic recovery,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“That has helped boost shipments of capital goods and information-related items” underpinning Japanese exports and business investment, he added.

Separate data by the Bank of Japan, due at 8:50 a.m. Monday (2350 GMT Sunday) will probably show Japan’s wholesale prices rose 4.7% year-on-year in June, slowing from the prior month’s fastest annual pace in 13 years.

That would ease some concerns about higher commodity costs squeezing profits at firms struggling to pass on rising costs to customers.

The corporate goods price index (CGPI), which measures the prices companies charge each other for their goods, rose 0.6% month-on-month in June, slowing from the prior month’s 0.7% increase.

With global inflationary pressures are pinching firms already hit by the coronavirus pandemic, the uptick in wholesale inflation is unlikely to prod the BOJ into withdrawing its massive stimulus any time soon.

As years of heavy money printing failed to fire up inflation to its 2% target, the BOJ is widely expected to maintain its powerful monetary easing for the foreseeable future.

The poll showed the BOJ will likely keep a -0.1% target for short-term rates and cap 10-year bond yields around 0% under its yield curve control at its July 15-16 policy-setting meeting.

(Reporting by Tetsushi Kajimoto; Editing by Raissa Kasolowsky)

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