Japan’s Nov core machinery orders tank more than expected

JAPAN’S core machinery orders fell further than expected in November, prompting the government to slash its view on the barometer of the corporate investment in the world’s third-largest economy to “stalling”.

Separate Reuters survey data showed confidence at big Japanese manufacturers had logged the first negative reading in two years, reflecting a slow recovery from the pandemic amid a global economic downturn and rising living costs.

Core machinery orders fell 8.3 per cent in November from the previous month, government data showed on Wednesday.

The decline was significantly bigger than the 0.9 per cent dip expected by economists in a Reuters poll and marked the first decrease in two months after a 5.4 per cent gain in October.

The Cabinet Office cut its assessment of the orders to “stalling”, deleting a previously used expression that they were in recovery. The downgrade in the assessment was first since September, when orders unexpectedly shrank.

Orders from manufacturers fell 9.3 per cent in November, a third consecutive month of contraction, driven down by a 32.7 per cent decline in orders from electric-machinery companies. Demand for items such as semiconductor-making equipment turned weaker, a government official told a media briefing.

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“Concerns about a slowing global economy are causing domestic demand to slow down,” the official said.

Non-manufacturers in “core” sectors excluding ship and electric utility firms also cut their orders by 3.0 per cent, following a 14.0 per cent increase in October.

Core orders, a highly volatile data series regarded as a leading indicator of capital spending in the coming six to nine months, were down 3.7 per cent in November on a year earlier, versus a forecast 2.4 per cent increase, the data showed. REUTERS