By Max Sato
(MaceNews) – Japanese machinery orders, the key leading indicator of business investment in equipment, rebounded slightly in July, staying on course toward a second consecutive quarterly rise in July-September, data released Wednesday by the Cabinet Office showed.
Orders from manufacturers marked the fourth straight rise while those from non-manufacturers posted the first drop in three months.
Data released last week showed that Japan’s economic rebound in the April-June quarter was firmer than expected as business investment in upgrading factories and offices turned out to be stronger than previously reported.
The key points from machinery orders data:
–Core private-sector machinery orders, which exclude volatile orders for power generation equipment and ships, rose a seasonally adjusted 0.9% on month in July, coming in weaker than the median economist forecast for a 3.1% rise. It was the eighth increase in the past 12 months and followed a 1.5% drop in June.
–The increase was led by orders from electrical machine makers for computers and electronic application equipment as well as from automakers for computers and metalworking machinery. Demand from the real estate industry for computers also supported core orders.
–Last month, the Cabinet Office projected that core machinery orders would post a 11.0% rise in July-September from the previous quarter following a 4.6% rebound in April-June.
–Core orders gained 11.1% from a year earlier in July, the fourth straight year-over-year rise after +18.6% in June. It was softer than the consensus call of a 15.7% gain. The recent double-digit percentage jump on year is in reaction to a 19.1% slump in the April-June quarter of 2020 and a 14.1% drop in July-September, when the first wave of the pandemic dampened global demand.
–The Cabinet Office maintained its assessment, saying, “Machinery orders are showing a pickup.”
Contact this reporter: max@macenews.com.
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