Core private-sector machinery orders rose a seasonally adjusted 4.1 percent in October from the previous month, lifted by strong growth in the nonmanufacturing sector, the government said Monday in maintaining its basic assessment.
The orders, which exclude those for ships and from utilities because of their volatility and are widely viewed as an indicator of future capital spending, totaled ¥878.3 billion.
The rise was the first in three months and followed a 3.3 percent drop in September.
Orders from the nonmanufacturing sector rose 4.6 percent to ¥533.6 billion, the highest since May 2013, while those from the manufacturing sector fell 1.4 percent to ¥331 billion.
The Cabinet Office maintained its basic assessment, saying machinery orders had been picking up but had since come to a standstill.
“If we look at (machinery orders’) three-month moving average, it is minus 0.5 percent . . . so we’ve decided to maintain the assessment,” a Cabinet Office official said at a news briefing.
Boosting capital spending has been a difficult task for the government of Prime Minister Shinzo Abe, because the world’s third-largest economy has failed to gather growth momentum.
Although the yen’s advance against the dollar has reversed since the election of Donald Trump as the next U.S. president in early November, the outlook for Japan remains uncertain, analysts say.
Miyuki Kiso, market economist at Mizuho Securities Co., took a cautious view on Japan’s outlook, particularly for the manufacturing sector.
“When companies are not sure how long the recent trend of the yen’s weakening against the dollar will continue, they cannot make bold capital investments,” Kiso said. “A wait-and-see mood is expected to continue going forward.”
Total orders, including those from the public sector and abroad, rose 3.3 percent to ¥2.15 trillion.
Overseas demand for Japanese machinery, an indicator of future exports, rose 1.9 percent to ¥799.8 billion.
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