Japan Machinery Orders Down 2.1%

Japan's core private-sector machinery orders, a closely watched indicator of corporate capital spending, fell 2.1% in May from the previous month, official figures showed on July 10. The fall was smaller than the decline of about 5.5% expected by financial markets.

Machinery orders placed by the manufacturing sector in May fell 5.5% month-on-month but were up 13.1% from a year earlier.

Orders placed by non-manufacturers rose 0.2% in May and were 17.7% higher than a year ago.

Spending by companies on plant and equipment is playing a key role in Japan's economic recovery and the figures are closely watched by investors although the core orders tend to fluctuate sharply from month-to-month.

Copyright Agence France-Presse, 2006

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