Japan core machinery orders declined more than expected in September weighing on the prospects of a sustained recovery in business investment.
Core machinery orders declined 4.4 percent on a monthly basis, in contrast to a 0.2 percent rise in August, data published by the Cabinet Office showed Thursday. This was the first fall in three months and worse than economists' forecast of 0.7 percent drop.
Year-on-year, core machinery orders were down 11.5 percent versus an expected fall of 11.6 percent.
Overall machinery orders also dropped 4.4 percent on month in September, reversing a 19.8 percent expansion posted in the previous month.
In the September quarter, the total value of machinery orders received by 280 manufacturers increased 7.8 percent from the previous three months.
Manufacturers expect overall machinery orders to fall 7.8 percent and core machinery orders to drop 1.9 percent in the fourth quarter.
Across this year non-residential investment is likely to have fallen by around 6.5 percent, Tom Learmouth, an economist at Capital Economics, said. And while the early distribution of an effective vaccine presents an upside risk, the recovery is likely to be lacklustre in 2021.
Another report from the Bank of Japan showed that producer prices continued to show negative growth in October.
Producer prices decreased 2.1 percent annually, following a 0.8 percent drop in September. Prices have been falling since March.
Month-on-month, producer prices slid 0.2 percent in October, the same rate of fall as registered in September.
For comments and feedback contact: editorial@rttnews.com
