Japan's core machinery orders rose more than expected in January, marking their second straight month of gains as rising exports and robust profits encourage companies to lift spending on plant and equipment. But analysts said any increase in capital expenditure would be moderate as Japan's return to an economic recovery would be driven largely by exports, with domestic demand seen weak.
Policymakers are growing increasingly confident that Japan's economy is steadily emerging from a lull, but some fret about the negative impact that the recent rise in oil prices could have on the fragile recovery. Core machinery orders, a highly volatile data series regarded as a leading indicator of capital spending, rose 4.2 percent in January from the previous month, Cabinet Office data showed on Wednesday.
That was a bigger increase than a median estimate for a 2.5 percent gain and follows a 1.7 percent rise in December. Among industrial sectors, makers of power generation equipment, aircraft and chemical machinery contributed to growth in private-sector orders.
The data also showed that overall machinery orders jumped 19.4 percent, the biggest rise since January 2008, as export orders surged a record 71.4 percent on bulk demand for chemical and communications equipment, a Cabinet Office official said. Exports have proven particularly resilient and provided a steady boost to the Japanese economy, rising for a 14th straight month in January even as an early Lunar New Year holiday adversely affected shipments to China, Japan's biggest export market.
Japan's economy likely rebounded in the first quarter after a slight contraction in the final quarter of last year, bringing with it a moderate pickup in capital expenditure. The growing bright signs have prompted the government to upgrade its economic assessment and scaled back market expectations of an imminent monetary easing by the Bank of Japan. The BoJ sees no need to ease monetary policy further at this time.
Comments
Comments are closed.