Japan’s core private-sector machinery orders increased 8.0 percent on month in July, the first rise in four months, boosted by a recovery in the manufacturing sector and strong demand for train cars, government data showed Monday.
The orders, which exclude those for ships and from utilities because of their volatility, came to ¥853.3 billion, according to the Cabinet Office. They marked the fastest pace of gains since January last year and followed a 1.9 percent drop in June.
Despite the sharp rise, the Cabinet Office retained its assessment that the recovery in machinery orders “came to a standstill.” The machinery orders data are considered an indicator of capital spending but tend to oscillate.
“Although machinery orders gained sharply this month, their three-month moving average managed to enter in positive territory so we kept the assessment intact,” a Cabinet Office official said.
Orders from the manufacturing sector increased 2.9 percent to ¥355.7 billion, lifted by the shipbuilding and nonferrous metal sectors.
Boosted by demand for train cars, orders from the nonmanufacturing sector rose 4.8 percent to ¥472.3 billion.
Overseas demand for Japanese machinery, an indicator of future exports, gained 9.1 percent to ¥995.9 billion.
Recent data showed capital spending grew 0.5 percent in the April-June quarter, revised downward from the initially reported 2.4 percent increase, prompting a downgrade to the nation’s gross domestic product.
For the current quarter through September, machinery orders are expected to gain 7.0 percent after falling for two consecutive quarters, according to the Cabinet Office.
Total orders, including those from the domestic public sector and abroad, were up 4.9 percent on month to ¥2.38 trillion.