Japan Core Machinery Orders Down 12.4 Pct in May

Tokyo, July 15 (Jiji Press)–Japan’s seasonally adjusted core machinery orders in May fell 12.4 pct from the previous month, down for the first time in two months, the Cabinet Office said Wednesday. Private-sector orders excluding those for ships and power equipment, closely watched as a leading indicator of corporate capital spending, totaled 962 billion yen. The drop was the steepest since the 13.1 pct decrease in December 2019, reflecting plunges in orders from shipbuilders and transport machinery makers following large-scale orders in April. It also far exceeded the median estimate of a 4.0 pct fall in a Jiji Press survey of 16 economic research institutes. The Cabinet Office kept its basic assessment unchanged, saying that machinery orders are showing signs of picking up. Machinery orders from manufacturers declined 14.9 pct to 437.2 billion yen, with orders from electronics makers, which had been robust due to artificial intelligence- and semiconductor-related demand, going down 12.0 pct, the first fall in three months. Core orders from nonmanufacturers declined 9.3 pct to 516.9 billion yen. As orders from the agriculture, forestry and fishery industries continued to decline, the government agency said that expectations for increases in rice production are not as strong as the previous year. Meanwhile, orders from the power industry more than quadrupled thanks to large-scale orders. Overall machinery orders, including those from the public sector and abroad, rose 9.5 pct to 4,422.2 billion yen. END [Copyright The Jiji Press, Ltd.]