ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Economy

Japan's machinery orders down 8.8% in June

Slight 0.3% drop projected for July-September period

Multi-axis processing machines are assembled at a Yamazaki Mazak factory in Minokamo, Gifu Prefecture. Capital spending has been driving growth in Japan in recent years, helping cover weakness in private consumption.

TOKYO (Kyodo) -- Japan's core private-sector machinery orders fell for a second straight month in June, government data showed Thursday, suggesting capital expenditure could weaken in coming months.

The orders, which exclude those for ships and from electric utilities because of their volatility, declined 8.8 percent from the previous month to 827.6 billion yen ($7.5 billion). The decline was sharper than the 3.7 percent fall recorded in May.

The Cabinet Office downgraded its assessment of machinery orders, saying they had been picking up, but are now in a lull.

Orders from the manufacturing sector fell 15.9 percent to 381.8 billion yen due in part to a fall in demand from electric machinery makers and chemical firms.

From the nonmanufacturing sector, minus ships and electricity, orders dipped 7.0 percent to 445.4 billion yen amid lower demand for machinery from construction firms and the retail industry.

Orders from overseas fell 12.0 percent to 925.0 billion yen, the lowest in a year.

Capital expenditure has been an important driver of economic growth in Japan in recent years, helping cover for persistent weakness in private consumption.

Should that change, it would pose challenges to Prime Minister Shinzo Abe, who is struggling to bring the country out of a years-long deflationary malaise.

The Cabinet Office will release gross domestic product data for the April-June quarter on Friday, with economists predicting the world's third-largest economy has rebounded after contracting in the previous quarter.

In April-June, core machinery orders rose 2.2 percent from the previous quarter to 2.68 trillion yen. But the office projected the orders will slip 0.3 percent in July-September.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media