Japan's core private-sector machinery orders fell 4.5% in January from the previous month, the first drop in four months, with declines seen in a wide range of sectors that have been recovering from the coronavirus pandemic-induced slump, government data showed Monday.
Following an upwardly revised 5.3% increase in December, the orders, which exclude those for ships and from electricity utilities due to their volatility, totaled ¥841.67 billion, according to the Cabinet Office. Machinery orders are seen as a leading indicator of capital spending.
Machinery orders from manufacturers dropped 4.2% to ¥362.40 billion following a downwardly revised 10.3% rise in the previous month, pushed down by declines in orders from electrical machinery producers and chemical companies.
Orders from nonmanufacturers slid 8.9% to ¥474.38 billion, down for the first time in four months. Declines in industries such as transportation and postal services and the financial and insurance sector contributed to the overall decrease.
The Cabinet Office maintained its assessment that machinery orders are "picking up" after upgrading the view for the third month in a row in December.
"Although the figures in January were down after three consecutive monthly rises, the three-month moving average kept increasing, so we left the assessment unchanged," a government official told reporters. "Sectors such as auto parts makers have stayed on a recovery track."
The official brushed aside the possibility that the fall in core machinery orders was caused by Japan's second state of emergency declared in January over the pandemic, saying the margin of decline seen is a "usual" occurrence.
In January, total orders were down 1.7% to ¥2.40 trillion, the first drop in two months.
Orders from overseas, seen as an indicator of future exports, climbed 6.4% to ¥1.03 trillion, up for the fourth straight month. Meanwhile, those from the public sector plunged 27.9% to ¥219.78 billion, the first drop in three months.