Japan machinery orders fail to boost the Economy

Japan machinery orders which is a highly volatile field rose to 3.5%, pointing to the state of capital spending in the country   Nevertheless, economists are sceptic about these figures claiming that it will not be sufficient to overhaul the aftermath of the previous sales hike.   Recent economic data published has been rather disappointing which suggests that this quarter might not be affluent as expected. Gross Domestic Product (GDP) fell to 7.1% as seen earlier this week which suggests that Japan is becoming an ailing economy.   Discrepancies are also being noted with the current core machinery orders. A government official states that a major chemical producer’s input was necessary to give a boost to the figures but non-manufacturers figures shows a fall of 4.3%.   Koya Miyamae, senior economist at SMBC Nikko Securities claims that manufacturers are probably more cautious more on their side.   Last week, Economy Minister Akira Amari said that further tax rise would not be considered unless the economy rebounds.   Prime Minister Shinzo Abe launched discussion about sales tax hike in October 2015 but given the weak economic expansion, further stimulus measures will be needed. Source: Reuters, Bloomberg
Priscilla Camryn By: Priscilla Camryn