Japan core machinery orders decline in December

Nathan Andrada – Fourth Estate Cooperative Contributor

Tokyo, Japan (4E) – Core machinery orders in Japan dropped in December on a seasonally adjusted basis from November, according to the Cabinet Office on Wednesday, a significant reversal from a huge increase the previous month.

Core orders, a key gauge of capital expenditure, declined 15.7 percent from the previous month, officials said, compared with the median estimate of 31 economists for a 4 percent decline, according to data compiled by Bloomberg News.

Machinery orders are considered by analysts as a leading indicator of corporate capital investment, as they typically rise if businesses grow their operations.

With a sales-tax increase in April expected to drag the economy back to contraction in the second quarter, weak private capital expenditure would bring more challenges for Prime Minister Shinzo Abe as he tries to revive an economy facing a 15-year deflation.

The official report also estimates core machinery orders will decline 2.9 percent in the quarter ended March from the previous three months, when orders rose 1.5 percent, a signal that companies may continue to be reluctant to boost private investment in the next months.

Core orders, which exclude volatile figures for ships and electric power firms, rose 6.7 percent from a year earlier on an unadjusted basis.

Article © AHN – All Rights Reserved
About the Author

Leave a Reply