–Cabinet Office Keeps View After October Upgrade: Orders Showing Signs of Pickup
–Official: December Rise After November’s 11.0% Dip Indicates Trend Not Strong Enough to Revise Up View
By Max Sato
(MaceNews) – Japanese core machinery orders, a key leading indicator of business investment in equipment and software, surged a record 19.1% on the month to the highest level in nearly 18 years, backed by one-off large orders for chemical devices from refineries and for nuclear power facilities from nuclear fuel producers, data from the Cabinet Office released Thursday showed.
The increase was also led by persistent demand for computers in an automation and digitization drive aimed at alleviating widespread labor shortages. December orders came from the financial and telecommunications industries.
The rebound at the end of the year more than offset a sharper-than-expected 11.0% pullback in November. The core measure’s December value of ¥1.05 trillion was the largest since Y1.07 trillion hit in January 2008, when core orders rose 15.1%.
In the October-December quarter, the core measure marked a sharp 7.9% rebound on quarter to ¥2.93 trillion, the biggest amount since ¥3.05 trillion recorded in April-June 2006. It followed a 2.1% dip in July-September and a slight 0.4% gain in April-June.
The Q4 results came in much stronger than the official projection of a slight 0.2% increase. The official forecast for the January-March quarter is a 4.5% pullback from the previous three-month period.
The Cabinet Office maintained its assessment that machinery orders are “showing signs of a pickup,” after having upgraded its view for the first time in 11 months in the October report.
“The 19.1% increase was in reaction to the previous month’s 11.0% drop and was also pushed up by large orders,” an official told Mace News. “So, it is not strong enough for us to upgrade our view at this point.”