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Japan’s machinery orders rise 3.4% in August

Japan’s machinery orders rise 3.4% in August

TOKYO: Japan’s core private-sector machinery orders rose 3.4 percent in August on month, the government said in a report on Wednesday. The Cabinet Office, following two successive months of solid orders, raised its assessment, stating machinery orders show “signs of picking up,” marking the first upgrade in 13 months. The orders in the recording period totaled 882.4 billion yen (7.9 billion U.S. dollars), the Cabinet Office’s data showed. The government’s figure for August, which excludes volatile shipbuilding and power-companies, came in higher than the median market forecasts in the recording period, and marks the first significant rise since an 8.0 percent leap logged in July. At that time the Cabinet Office said orders had “come to a standstill.”

The latest figure suggests that corporate capital spending is showing some signs of an uptick despite Japan’s exporters being pressured by a slowdown in overseas demand, and ongoing political uncertainty ahead of the upcoming lower house election. Analysts here said, however, that the data could indicate that the increase in orders could underpin the government’s push for a domestic demand-led recovery. Orders from the manufacturing sector marked a significant increase, leaping 16.1 percent to 413.0 billion yen, buoyed by rising demand for transporting machines and machine tools, the data set showed. Non-manufacturing sector orders rose 3.1 percent to 486.9 billion yen, the Cabinet Office said, marking the third successive month of gains. Orders from overseas for Japanese machinery, widely regarded as future indicator of exports, jumped 11.5 percent to 1.11 trillion yen, in the recording period, the latest data also showed.Total orders, including those from the domestic public sector and overseas, came to 2.58 trillion yen, the Cabinet Office said, rising 8.5 percent on month.

Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period ahead and such business investment accounts for roughly 15 percent of Japan’s gross domestic product.Types of machinery included in the monthly government survey comprise engines and turbines, heavy electrical machinery, electronic and communication equipment, industrial machinery, machine tools, railway rolling stock, road vehicles, aircraft, ships, water crafts, as well as sub types in the aforementioned categories.