Japan's machinery orders rebound 8.8%

Japan's core machinery orders rebounded 8.8 percent in June from the previous month to JPY 745.8 billion (USD 7.9 billion), the government said Thursday.
Core private-sector orders, which exclude volatile demand from electric utilities and for ships, are considered a leading indicator of corporate investment trends in the next three to six months. It marked the first gain in three months after a record plunge of 19.5 percent in May, according to data released by the Cabinet Office.
By industry, orders by manufacturers grew 6.7 percent percent from a month earlier, while those by non-manufacturers gained 4.0 percent. Overseas demand, an indicator of future Japanese exports, surged 62.8 percent. But the Cabinet Office revised down its assessment of machinery orders for June for the second straight month, saying, "the orders are in seesaw movements," compared with last month's "at a standstill in their growth picking up on a growth trend." For the April-June period, core machinery orders 10.4 percent from the previous quarter, down for the first time in five quarters as companies were reluctant to invest in plant and equipment after the April sales tax hike. It also marked the sharpest quarter-on-quarter drop since the January-March period of 2009, when the country was hit by the 2008 global financial crisis. Looking ahead, the Cabinet Office projected that the orders will rise 2.9 percent in the July-September quarter.
The data came after the Cabinet office said Wednesday that the world's third-biggest economy shrank at an annualized rate of 6.8 percent in the second quarter.