April 23, 2018, 7:49 am
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Machinery orders to slip

TOKYO- Japan’s core machinery orders were expected to decline in November after solid gains the previous month, though analysts are predicting a gradual rising trend in a sign the economy remains in an extended growth spurt.

Core orders, a highly volatile data series regarded as an indicator of capital spending, are forecast to drop 1.4 percent in November from the previous month, after 5.0 percent growth in October, a Reuters poll of 16 economists found.

Compared with a year earlier, core orders, which exclude those of ships and electric power utilities, were seen falling 0.7 percent from a 2.3 percent gain in October, the poll showed.

“Manufacturers’ investment on power-saving and automation underpins core machinery orders,” said Yosuke Yasui, senior economist at Japan Research Institute in the survey.

Capital spending is expected to remain strong thanks to upbeat corporate earnings and investment demand for the 2020 Tokyo Olympics.

Still, some analysts expect only a modest boost to the economy.

“Core machinery orders have been moving sideways since 2015....firms’ capital spending is on the moderate rising trend but they are not strong enough to drive the economic growth on their own,” said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities. – Reuters 
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