Japan Jan core machinery orders unexpectedly fall

[TOKYO] Japan's core machinery orders unexpectedly fell in January from the previous month, highlighting that the country's economic recovery remains fragile.

Core machinery orders, a highly volatile data series regarded as a leading indicator of capital spending in the coming six to nine months, fell 3.2 per cent in January, Cabinet Office data showed on Monday.

The fall compared with economists' median estimate of a 0.5 per cent increase.

Compared with a year earlier, core orders, which exclude those of ships and electrical equipment, fell 8.2 per cent in January, versus the estimate for a 3.3 per cent decrease.

Japanese policymakers hope a recovery in capital spending will help drive growth in the world's third-largest economy and pull it out of deflation and stagnation.

While recent Japanese data have been largely upbeat, the readings are still subdued, and inflation while picking up remains well below the BOJ's 2 per cent target.

The BOJ is seen keeping its short-term policy interest rate at minus 0.1 per cent and the 10-year government bond yield target at around zero per cent when its board meets later this week.

REUTERS