Japan's core machinery orders plunged more than expected in September in another sign that the world's third-largest economy was slipping into recession, dragged down by a slowing global economy, tensions with China and weakening domestic demand. The nation's current account surplus, the broad measure of its trade and other flows, also fell more than forecast, following a sharp drop in exports.
Core machinery orders, seen as a leading indicator of capital spending in the coming six to nine months, fell 4 .3 percent in September compared with a median forecast of a 1.8 percent decline and a 3.3 percent drop in August, government data showed on Thursday. The data are the latest in a string of gloomy statistics reflecting the pain inflicted on the economy by the slowdown in China, Japan's top export market, compounded by a wave of anti-Japanese sentiment triggered by a territorial dispute.
With the effect of rebuilding from last year's earthquake and tsunami fading, the government acknowledged earlier this week that its index of leading indicators gauge fell to a level suggesting the onset of a recession. Manufacturers surveyed by the Cabinet Office have forecast that core orders will rise 5.0 percent in October-December after falling 1.1 percent in the previous quarter.
Compared with a year earlier, core orders fell 7.8 percent in September. Separate government data showed the nation's current account surplus f ell n early 69 percent in September from a year earlier and stood at 503.6 billion yen ($6.3 billion), against a median forecast for 774.5 b billion yen. In seasonally adjusted terms, the current account logged a 142 billion yen deficit, the first shortfall since such calculations began in 1996.