Machine orders rise as Abe vows stimulus ahead of poll

Bloomberg

Machinery orders rose for the first time in three months, a sign that companies may expect the economy to return to growth in 2013.

Orders, an indicator of capital spending, climbed 2.6 percent in October from the previous month, the Cabinet Office said Wednesday. The median estimate of 25 economists surveyed by Bloomberg News was for a 3 percent increase. Large orders can cause volatile results.

Rising orders and production in October suggest the economy is laying the foundations for recovery after contractions in the last two quarters. The yen has weakened around 3.7 percent against the dollar in the last month, while Shinzo Abe’s Liberal Democratic Party, leading in polls before Sunday’s Lower House election, has pledged fiscal stimulus to stoke growth.

“Companies are still cautious but a weaker yen, and signs of recovery in the global economy are providing some relief,” said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. “Japan’s economy is going to have a moderate recovery.”

Orders from the auto industry rose 17.8 percent, the first rise in five months, according to the Cabinet Office.