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Japan's core private-sector machinery orders rise 2.9 pct in January

By Xinhua , 2020-03-20 02:34:05

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Core private-sector machinery orders in Japan rose in January from a month earlier, the government said in a report on Monday.

According to the Cabinet Office, orders in the recording period increased 2.9 percent from the previous month, owing to an increase in orders from manufacturers.

The orders, excluding those for ships and from utilities because of their volatility, came to 839.36 billion yen (7.87 billion U.S. dollars), the office said.

The latest reading follows an 11.9 percent drop in December, although the Cabinet Office opted to maintain its assessment that orders are "stalling."

Orders from manufacturers increased 4.6 percent to 380.32 billion yen, the Cabinet Office said, while those from non-manufacturers, excluding ships and electric utilities, dropped 1.7 percent to 460.69 billion yen, the latest data series showed.

Overseas orders, which act as a barometer of future exports, however, climbed 9.1 percent to 867.10 billion yen, the Cabinet Office said.

Total orders, including those in the public sector, jumped 11.5 percent to 2.39 trillion yen in the recording period, the office also said.

Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period ahead.

A rise in capital expenditure can boost the economy as Japanese companies are producing more machinery to meet rising demands from overseas markets.

A drop, however, has the opposite effect and weighs on the economy and can see production at best tapered or at worst significantly reduced.

Such business investment accounts for roughly 15 percent of Japan's gross domestic product.

Types of machinery included in the monthly government survey comprise engines and turbines, heavy electrical machinery, electronic and communication equipment, industrial machinery, machine tools, railway rolling stock, road vehicles, aircraft, ships, water crafts, as well as sub types in those categories.

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