News ID: 211670
Published: 1029 GMT March 14, 2018

Japan core machinery orders rebound, easing capex concerns

Japan core machinery orders rebound, easing capex concerns

Japan's core machinery orders rebounded in January from a steep decline the previous month, handily beating expectations in a sign that capital spending will continue contributing to economic growth.

The 8.2 percent rise in core orders, a highly volatile data series regarded as an indicator of capital spending in six to nine months, was more than the 5.6 percent increase expected by economists, Reuters wrote.

In December core orders tumbled a revised 9.3 percent, the fastest fall in more than three years. The Cabinet Office said in a statement on Wednesday that core machinery orders were ‘recovering’.

Japan's economy expanded more than initially estimated in the last quarter of 2017, thanks to an upward revision of capital expenditure and inventory data, confirming the longest run of growth in 28 years.

Rising machinery orders suggest that Japan's recent growth spurt is likely to continue, but uncertainty surrounds the policy outlook because revelations of a cover-up of suspected cronyism is eroding confidence in the prime minister.

"I expect capital expenditure to continue to rise gradually, driven by strength in overseas economies," said Yusuke Ichikawa, senior economist at Mizuho Research Institute.

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