Japan Core Machinery Orders Slide 3.0% in November

Weak domestic demand continues to hit manufacturers , with Japan's chronic deflation prompting consumers to delay purchases in the hope of further price falls.

For the third consecutive month Japan's core private-sector machinery orders, an indicator of corporate capital spending, fell in November, data showed on Jan. 13.

However, orders from the manufacturing sector rose 10.6% in November, compared with a 1.4% hike in the previous month.

Orders from non-manufacturers tumbled 10.5% in November. The government downgraded its assessment on machinery orders, warning of "weak movement" in the nation's non-manufacturing sectors.

The data, which exclude particularly volatile demand from power companies and for ships, followed a 1.4% fall in October and a 10.3% slide in September, the Cabinet Office said.

Weak domestic demand meanwhile continues to hit manufacturers at home, with Japan's chronic deflation prompting consumers to delay purchases in the hope of further price falls, clouding corporate investment planning. Japan saw its core consumer price index fall for a 21st straight month in November.

A rush by car buyers to use expiring subsidies, demand for products such as air conditioners in Japan's hottest ever summer and smokers who stocked up on cigarettes ahead of a tax hike helped push up Japan's growth in the July-September quarter.

But some analysts have warned of a possible contraction in the fourth quarter in the absence of such one-off factors, amid increasing signs that Japan's economy is slowing.

Copyright Agence France-Presse, 2011

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