–Japan Govt Keeps View: Pickup in Machine Orders Pausing
By Max Sato
(MaceNews) – Japanese machinery orders, the key leading indicator of business investment in equipment, posted a solid rebound in October amid signs of a slight easing in delayed parts supply from Southeast Asia and relaxed Covid restrictions on business hours and public events in Japan, data released Monday by the Cabinet Office showed.
Orders from manufacturers marked the first drop in two months while those from non-manufacturers recorded the first rise in two months.
The key points from machinery orders data:
* The rebound was led by orders for computers from electric and business machine makers and financial firms as well as those for wind-and hydro-powered machines from general machine producers, and for train cars from transportation firms. Orders for chemical machines, boilers and turbines declined.
* Core orders gained 2.9% from a year earlier in October, the seventh straight year-over-year rise, with the pace of increase decelerating further from 12.5% in September and 17.0% in August. It was softer than the consensus call of a 4.0% gain. The recent double-digit percentage gains were 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 after downgrading it in October (for August data), saying, “The pickup in machinery orders is pausing.” Previously, it had said, “Machinery orders are showing a pickup.”
* Orders from overseas, which are not part of the core measure, rebounded 17.2% on the month in October for the first rise in three months after falling 14.2% in September. From a year earlier, this category recorded the seventh straight year-on-year rise, up 41.8% after rising 41.2% the previous month.