• Kyodo


Core machinery orders jumped 8.3 percent to ¥853.6 billion in December, the government said Thursday, suggesting companies suddenly became eager to boost investment.

The orders are viewed as a leading indicator of capital spending.

Compared with the previous month, private-sector orders, excluding those in the volatile ships and utilities sectors, rose following a seasonally adjusted 1.3 percent gain in November and a 6.4 percent drop in October, the Cabinet Office said.

For the first time in four months, the government upgraded its basic assessment of machinery orders, saying they have “shown signs of a moderate pickup,” after stating last month that orders were at a “standstill in their pickup trend.”

Machinery orders figures are volatile but closely watched because Prime Minister Shinzo Abe views business investment — which makes up about 15 percent of gross domestic product — as one of the pillars of growth needed to overcome nearly two decades of deflation.

In December, orders from the manufacturing sector surged 24.1 percent — the sharpest since a 27.8 percent leap in June 2006 — to ¥396.9 billion, while those from nonmanufacturers rose 7.2 percent to ¥477.0 billion.

Total orders, including those from the domestic public sector and abroad, climbed 8.6 percent to ¥2.2 trillion.

But overseas demand for Japanese machinery, an indicator of future exports, fell for the fourth consecutive month, sinking 6.9 percent to ¥797.3 billion.

In 2014, core orders rose 4.0 percent from 2013 to ¥9.69 trillion, up for the second straight year, with manufacturers’ orders growing 11.3 percent and nonmanufacturers declining 0.8 percent.

Looking ahead, the Cabinet Office estimated core orders will expand 1.5 percent in the quarter through March, up from the 0.4 percent gain logged in the previous quarter and the 5.6 percent increase posted in the July-September quarter.

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.