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Writer's pictureBy The Financial District

Japan's Machinery Orders Rise Sharply

Japan's key gauge of capital spending jumped the most in a year in February, rebounding sharply from the prior month's decline, in a welcome sign for domestic demand despite concerns about a weakening yen and its impact on the cost of living, according to Tetsushi Kajimoto's report for Reuters.


Core machinery orders rose 7.7% in February from the previous month.



Core machinery orders rose 7.7% in February from the previous month, surpassing the 0.8% increase expected by economists in a Reuters poll, as per Cabinet Office data. It marked the fastest growth in core orders since January 2023 and more than recouped a 1.7% fall in the previous month.



"Machinery orders have hit the bottom," said Takeshi Minami, chief economist at Norinchukin Research Institute.


"Japanese firms are making higher profits and hiking wages lately so it's natural for them to raise investment as well," he added.


However, Minami cautioned that risks remain due to uncertainty over the global economy, citing the Middle East crisis as a potential trigger for a spike in crude oil prices, which could discourage Japanese firms from boosting capital expenditure.




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