Japanese companies' capital spending stalled in the first quarter, raising the risk of a GDP downgrade amid the Iran war.
The conflict has disrupted global economic outlook, leaving oil-import-dependent Japan vulnerable to energy shocks.
Kazutaka Maeda, economist at Meiji Yasuda Research Institute, said: "Results were weaker than expected, reflecting a pullback from earlier strength."
First-quarter capex rose 0.047% year-on-year, down from 6.5% in the previous quarter. On a seasonally adjusted quarterly basis, it fell 2%.
Manufacturing spending dropped 0.4% year-on-year. Corporate sales rose 1.1%, and recurring profits increased 14.6%.
Prime Minister Sanae Takaichi's government offers tax credits for capital investment and boosts public spending in strategic sectors.
