Japanese Machinery Orders Surge In September

By Agence France-Presse Japanese private-sector machinery orders surged 12.7% in September from the previous month after falling a steep 13.6% in August, the government said Nov. 11. On a year-on-year basis, orders excluding volatile shipbuilding and power-generation equipment orders fell 2.7% in the month after dropping 20.3% in August, the Cabinet Office said. Machinery orders are considered a leading indicator of corporate capital spending. The positive numbers for September were above market consensus but not too surprising since August had been so poor, economists said. "A bounce was entirely expected, given the free-fall in the previous month, and the level is now consistent with a [very] modest recovery in capital spending," says J.P. Morgan Chase & Co. economist Ryo Hino. Economists earlier forecast September machinery orders would come in at between a rise of 3% and 11.2% month-on-month, with a consensus rise of 6.4%. Machinery orders from manufacturers rose 11.4% month-on-month while orders from non-manufacturers were up 5.3%, the Cabinet Office said. "Although we saw the September figure turn around from the negative 13.6% in August, the absolute number for the month was 865.3 billion yen [US$7.24 billion], below the 871.8 billion posted in June," notes a Cabinet Office spokesperson. "Given the continuing lower level of machinery orders, we left our assessment of the trend unchanged. Our assessment is that machinery orders are showing signs of bottoming out." Copyright Agence France-Presse, 2002

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