Japan's machinery orders increase 4.2% in Jan

09:49, March 09, 2011      

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Japan's core machinery orders rose 4.2 percent in January from the previous month, marking the second rise in five months, the Cabinet Office said in a report on Wednesday.

According to the government data, orders in the recording period totaled 766.1 billion yen (9.28 billion U.S. dollars), beating median economists' expectations.

Average forecasts were for a 2.5 percent increase on the back of December's 1.7 percent rise, economists said.

Ongoing robust demand from China and the U.S. continues to boost corporate earnings and companies are feeling more inclined to invest more in plants, machinery and equipment, the data showed.

And whilst the government maintained its assessment in January of machinery orders, saying they are in a recovery trend, they highlighted the fact that weak movements are being seen in the non- manufacturing sector.

On a non-adjusted basis the Cabinet Office said that core machinery orders, which exclude volatile orders from utilities and shipbuilders, increased 5.9 percent in January from a year earlier, with manufactures surveyed predicting core orders will rise 2.7 percent in the January-March period, from the previous quarter.

Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period head.

Such business investment accounts for roughly 15 percent of Japan's gross domestic product.

Source: Xinhua
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