Japan’s core machinery orders decline

TOKYO: Japan’s core machinery orders fell short of expectations in March from the previous month and companies forecast a decline in investment over April-June, underscoring the fragile nature of the country’s export-driven economic recovery.

But analysts say the data, considered as highly volatile, does not signal any major change in a moderate but broad-based uptrend in capital expenditure in a recovering economy.

Core orders, regarded as a leading indicator of capital spending in the coming six to nine months, rose 1.4 percent in March from the previous month, Cabinet Office data showed on Wednesday.

The outcome marked a second straight rising month but undershot the median market forecast for a 2.1 percent gain. Companies surveyed by the Cabinet Office forecast that core orders, which exclude those for ships and from electric power utilities, would fall 5.9 percent in the AprilJune period following a 1.4 percent drop in the first quarter.

The weak outlook suggests some companies may be turning cautious on investing because of uncertainty about the possible impact of US President Donald Trump’s protectionist policies on export-reliant Japan.

Machinery export orders fell 2.8 percent in March to mark a second consecutive declining month, reflecting weak overseas demand for industrial, electronic and communications equipment.

But many analysts warned against reading too much into the temporary weakness in orders, pointing to prospects of recovery in global demand and business morale.