TOKYO (Reuters) – Japan’s machinery orders posted their biggest single-month fall in six months in August as pressure from a global economic slowdown and a weaker yen that pushes up import costs darken the outlook for corporate spending.
The Reuters Tankan survey separately showed that business confidence at big manufacturers fell to a five-month low, as a double whammy of inflation and slowing global growth hurt the trade-reliant economy.
Core orders, a highly volatile data series regarded as barometer of capital expenditure in the coming six to nine months, fell 5.8% in August from the previous month, Cabinet Office data showed.
That marked the sharpest month-on-month decline since a 9.8% drop in February and was weaker than the median forecast of a 2.3% fall by economists in a Reuters poll.
Compared with a year earlier, core orders, which exclude volatile numbers from shipping and electric utilities, rose 9.7% in August, the data found.
By sector, orders from manufacturers advanced 10.2% from the previous month, lifted by a large-size order for a nuclear motor in the non-ferrous metals sub-sector, while orders from the non-manufacturers shrank 21.4%.
In the Reuters Tankan survey, the manufacturers’ sentiment index slipped to 5 in October from 10 last month as monetary tightening around the world and the yen’s recent decline to a 24-year low against the dollar hurt corporate sentiment.
The world’s third-largest economy has managed to expand at a relatively strong pace so far this year, growing an annualised 3.5% in the second quarter as private spending picked up after the government lifted local COVID-19 restrictions.
But it faces risks from an economic slowdown in Asia and the United States, which is clouding the prospects for a stronger recovery and making companies and consumers more cautious at home.
Source: Economy - investing.com
