Japan Core Machinery Orders Up 2.1% in June

Jiji Press

17:23 JST, August 19, 2024

TOKYO (Jiji Press) — Japan’s seasonally adjusted core machinery orders in June rose 2.1% from the previous month, the Cabinet Office said Monday.

Private-sector orders excluding those for ships and power equipment, closely watched as a leading indicator of corporate capital spending, grew to ¥876.1 billion.

Core orders increased for the first time in three months, outpacing the median estimate of a 0.9% rise in a Jiji Press poll of 17 economic research institutes.

The Cabinet Office maintained its assessment that the pickup in machinery orders is at a standstill.

Core machinery orders from manufacturers shrank 0.3% to ¥422.4 billion, reflecting a decrease in orders for semiconductor production equipment.

Orders from nonmanufacturers climbed 2.4% to ¥450.4 billion, boosted by strong orders for cranes and other transportation machinery from the wholesale and retail sector.

Overall machinery orders, including those from the public sector and overseas, fell 6.0% to ¥3,053.1 billion.

For April-June, core machinery orders edged down 0.1% from the previous quarter to ¥2,620.2 billion. The Cabinet Office attributed the decrease to weak demand for communications equipment to be used in base stations for mobile phones. Orders are projected to increase 0.2% in July-September.

“Willingness for capital investment will likely pick up mainly among companies related to domestic demand,” Takeshi Minami of Norinchukin Research Institute Co. predicted.