Tuesday, August 09, 2005

IS JAPAN THE PLACE TO BE?

Machinery orders jump 11.1% to five-year high

Core private-sector machinery orders increased a seasonally adjusted 11.1 percent in June from the previous month to 1.059 trillion yen, the highest level in five years, the government said Tuesday.
The figure, a leading indicator of corporate capital spending, is the highest since October 2000. It marked the first expansion in three months and the margin of increase topped the average market projection of 6.1 percent.
The 11.1 percent growth represents an unadjusted 5.4 percent increase from a year earlier, the Cabinet Office said.
By quarter, the orders rose 0.8 percent in the April-June period from the preceding quarter to 3.032 trillion yen for the third straight quarterly increase.
Looking ahead, the office projected that core machinery orders will expand 0.9 percent in the July-September period from the preceding quarter to 3.058 trillion yen.
Private-sector economists said the data underlines a growing corporate appetite for spending on plants and equipment on the back of the sustained economic recovery.
"The latest data indicate the economy is rebounding from the soft patch that has lasted since the middle of last year," said Peter Morgan, chief economist at HSBC Securities (Japan) Ltd.
Morgan said he expects higher growth in core machinery orders in the July-September quarter, calling the government projection "pessimistic."
The larger than expected growth in core machinery orders led the government to revise upward its assessment of such orders for the first time in six months.
Core machinery orders were "marking a gradual increase," the Cabinet Office said. In May, the office said the trend of the orders was "flat."
According to the Cabinet Office, orders from manufacturers rose 14.9 percent in June to 465.4 billion yen, rebounding from a 20.6 percent fall in May.
Orders from nonmanufacturers climbed 8.0 percent to 595.6 billion yen after a 1.5 percent increase in May.
The Japan Times: Aug. 10, 2005

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