Japan’s core machinery orders face a second month fall

Japan's core machinery orders have declined for the second straight month in February, revealing a slow pickup in the economy after the last year’s recession led by a sales tax hike.

Core machinery orders, being a key indicator for capital expenditure, are said to have slumped to 2.8% in February following January’s decline.

In fact, they rose by 8.3% in December, highlighting the fastest pace in six months.

According to an analyst at Japan Research Institute, machine orders are most likely to fall further due to a temporary pause in industrial production.

The Norinchukin Research Institute's Minami indicates that these two consecutive declines in machinery orders results from a momentum being established for organizations to grow their spendings.

However, it is assumed that giant companies wish to cut capital spending as they benefit from a weaker yen as per the BOJ’s latest ‘tankan’ business sentiment survey.

Even though the Japanese inflation is seen to come to a halt, the BOJ still retains its stimulus package.

However, markets are looking forward to bank’s next meeting on April 30 in regards to new long-term predictions which may eventually cause a decrease in price projections.

The machinery order data are yet to be released at 8.50 a.m on April 13.

Priscilla Camryn By: Priscilla Camryn