• Kyodo


Core private-sector machinery orders rose a seasonally adjusted 4.6 percent in July from the previous month for the second consecutive month of growth, supported by a rebound in the manufacturing sector, the Cabinet Office said Wednesday.

Close observation is needed to determine if the trend will continue, a Cabinet Office representative said during a briefing on the data, citing further possible downturns in overseas markets as a risk factor to the economy.

The Cabinet Office maintained its assessment on the key gauge of companies’ appetite for capital investment, saying machinery orders were “seesawing.”

The core orders, which exclude those normally seen as volatile, such as orders for ships and those from electric utilities, were valued at ¥742.1 billion in July.

Kenta Ishizu, a market economist at Mizuho Securities Co., said it is hard to expect core orders to recover to near ¥800 billion in the coming months due to weak overseas demand.

“With the Chinese economy decelerating and the European debt crisis unlikely to be resolved anytime soon, it is difficult for companies to beef up their capital investment,” he said.

Machinery orders from manufacturers grew 12.0 percent, for the first growth in three months, as 11 of the 15 sectors registered gains, up from the previous month’s six sectors. Meanwhile, those from nonmanufacturers went down 2.1 percent for the first drop in two months.

By industry, the steel sector contributed largely to the July growth, given relatively large orders for metal processing machinery. The electric, transport and construction machinery sectors also boosted their orders.

Overseas demand for Japanese machinery gained 3.0 percent, but orders from the domestic public sector slid 13.5 percent.

Overall orders, received by 280 select machinery makers and covering demand from the private and public sectors as well as from abroad, shrank 2.6 percent to ¥1.897 trillion, registering the first decline in two months.

Wholesale prices down

Wholesale prices fell 1.8 percent in August from a year earlier for the fifth straight month of decline due to falling steel prices and a slowdown in the Chinese and European economies, the Bank of Japan said Wednesday.

The index of corporate goods prices stood at 100.3 against the 2010 base of 100, the BOJ said in a preliminary report.

Month on month the index rose 0.3 percent from July due to an hike in crude oil prices and a rise in the price of electricity after the feed-in tariff system kicked in requiring utilities to buy renewable sources at preset premiums.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.