Japan’s December core machinery orders rise 2.7% month/month
JAPAN’S core machinery orders in December rose slightly more than expected but remained down year-on-year, government data showed on Monday, although further gains are expected to be capped by global and domestic headwinds.
Core orders, a highly volatile data series regarded as a leading indicator of capital spending in the coming six to nine months, went up 2.7 per cent in December from the previous month, Cabinet Office data showed.
That compared with the median forecast for a 2.5 per cent rise by economists in a Reuters poll.
On a year-on-year basis, core orders, which exclude volatile numbers from shipping and electric utilities, declined 0.7 per cent, smaller than the forecast 1.4 per cent fall.
By sector, orders from manufacturers increased 10.1 per cent in December from the previous month, lifted by chemicals industries and information and communication machinery. That followed a 7.8 per cent decline in November.
Service-sector orders fell 2.2 per cent after slipping 0.4 per cent in the prior month, weighed down by a decline in orders from mail and transport as well as telecommunication industries.
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For the January to March period, core machinery orders are expected to rise 4.6 per cent quarter-on-quarter thanks to an increase in demand for motors and electronic and telecommunications equipment in unspecified industries, a Cabinet Office official said.
Still, the government retained its view that machinery orders had “stalled” for 14 straight months, pointing to a 1.0 per cent drop in core machinery orders for October-December period.
While overall appetite for capital investment is still strong, there are signs of weakening in the non-manufacturing sector as moves to normalise economic activity run their course, said Masato Koike, economist at Sompo Institute Plus.
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“The pace of recovery will be restrained given the limited recovery in domestic demand and the lack of momentum in the overseas economy,” Koike said. REUTERS
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