Japan March core machinery orders disappoint, outlook gloomy

[TOKYO] Japan's core machinery orders rose less than expected in March from the previous month, casting doubt over whether recent signs of economic recovery will be sustainable.

Core orders, a highly volatile data series regarded as a good indicator of capital spending in the coming six to nine months, rose 1.4 per cent in March from the previous month, Cabinet Office data showed on Wednesday. This undershot the median estimate of a 2.1 per cent rise expected by economists in a Reuters poll.

The data suggests companies are cautious about investing amid uncertainty about the possible impact of US President Donald Trump's protectionist policies on export-reliant Japan, and may delay capital spending in the coming months.

Companies surveyed by the Cabinet Office forecast that core orders, which exclude those of ships and from electric power utilities, would fall 5.9 per cent in the April-June quarter.

In January-March, core orders dropped 1.4 per cent from the previous quarter.

Compared with a year earlier, core orders declined 0.7 per cent in March, versus the median estimate for a 0.6 per cent rise.

The Cabinet Office maintained its assessment of machinery orders, saying the pick-up in machinery orders is stalling.

REUTERS