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Japan's core private-sector machinery orders rise 4.1 percent on month in Oct.

Xinhua, December 12, 2016 Adjust font size:

Japan's core private-sector machinery orders increased 4.1 percent in October from a month earlier on a seasonally adjusted basis, the first rise in three months, the Cabinet Office said on Monday.

Private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, declined 5.6 percent in October on a year-on-year basis, to 878.3 billion yen (7.61 billion U.S. dollars).

The total value of machinery orders received by 280 manufacturers operating in Japan rose 3.3 percent in October from the previous month on a seasonally adjusted basis to 2.15 trillion yen.

In October, machinery orders from the manufacturing sector fell 1.4 percent on month to 331.0 billion yen, while those from the nonmanufacturing sector added 4.6 percent to 533.6 billion yen.

Looking ahead, companies surveyed by the Cabinet Office expect their orders would retreat 5.9 percent in the October-December period from the previous quarter. This compares to a 7.3 percent rise in the previous July-September quarter.

Maintaining its basic assessment, the Cabinet Office said machinery orders had been recovering but have come to a standstill.

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 ahead and such business investment accounts for roughly 15 percent of Japan's gross domestic product.

Prime Minister Shinzo Abe is relying on companies' capital expenditure to drive private sector-led growth. However, the world's third-largest economy is severely lacking in key drivers with businesses reluctant to spend, derailing the government's growth plans. Endit