Japan machinery orders seen up

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    TOKYO- Japan’s core machinery orders likely rose in November following four months of decline, rebounding after a sales tax hike and weak external demand put a damper on business investments, a Reuters poll showed on Friday

    Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine month, were seen rising 3.2 percent in November from the previous month, the poll of 16 economists found.

    They dropped 6.0 percent in October when the nation raised the national sales tax to 10 percent from 8 percent.

    From a year earlier, core orders, which exclude those for ships and electric utilities, are expected to have slipped 5.4 percent in November following a 6.1 percent fall in October.

    “Uncertainty for the economic outlook such as impact from the sales tax hike persist, so companies likely stayed cautious about business investments,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

    Some manufacturers appear to have postponed their investments due to shaky prospects for the global economy, said Yusuke Shimoda, senior economist at the Japan Research Institute.

    “But their spending to cope with a labor shortage likely supported machinery orders,” he said.

    The Cabinet Office will release the machinery orders data at 8:50 a.m. on Thursday, Jan. 16 Tokyo time (2350 GMT Jan. 15).

    The Bank of Japan’s corporate goods price index (CGPI), which measures the prices companies charge each other for goods and services, was seen rising 0.9 percent in December from a year earlier, due to a rise in oil prices and the sales tax hike, the poll found.

    The central bank will release the data on Thursday.

    Next week’s data also includes the current account balance, which is expected to show a surplus of 1.42 trillion yen ($12.96 billion) in November, led by gains in income from investments overseas.

    The finance ministry will release the current account balance on Tuesday, Jan. 14. – Reuters

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