Japan said June 10 that core machinery orders rose for the first time in three months, easing worries about the outlook for corporate investment in new equipment and factories. Orders climbed at a faster-than-expected pace of 5.5% in April from the previous month, the Cabinet Office said. The gain followed an 8.3% decline in March.
With rising oil prices putting additional pressure on company earnings, analysts said, corporate Japan was likely to take a cautious stance on investing in new facilities. "We are not looking for a crash in capital expenditure," but the outlook appears to be weakening, said Morgan Stanley economist Takehiro Sato. "Private demand as a whole appears to have peaked at the end of last year."
Orders from overseas climbed 4.6% in April after declines of 16.1% in March and 13.2% in February. But the momentum in foreign orders "seems feeble for a rebound after two straight months of double-digit decline," said Sato.
Machinery orders placed by the manufacturing sector in April rose 1.9% from the previous month and orders by non-manufacturers were up 8.8%, the government said. "Machinery orders show that manufacturing capex is suffering moderate damage from the pressure on margins, but the non-manufacturing side is holding up well," noted Macquarie Securities economist Richard Jerram.
Copyright Agence France-Presse, 2008
