Japan's core private-sector machinery orders rise 1.5 pct. in November

Source: Xinhua| 2021-01-14 19:51:48|Editor: huaxia

TOKYO, Jan. 14 (Xinhua) -- Core private-sector machinery orders in Japan increased in November last year from a month earlier, the government said in a report on Thursday.

According to the Cabinet Office, orders in the recording month rose 1.5 percent from the previous month, with the total orders, excluding those for ships and from utilities because of their volatility, coming to 854.83 billion yen (8.22 billion U.S. dollars).

The latest reading follows a 17.1 percent increase the previous month, the Cabinet Office's data showed.

The Cabinet Office upgraded its assessment for the second straight month, stating that machinery orders are showing "signs of picking up."

The latest assessment, the most optimistic since August 2019, compares to October's assessment stating that orders were "bottoming out."

Orders from non-manufacturers gained 5.6 percent to 510.87 billion yen (4.91 billion U.S. dollars), marking the third successive month of growth, although the pace of increase slowed from October's 13.8 percent.

The Cabinet Office's data showed that telecommunications and construction firms largely contributed to the increase among sectors surveyed.

"As for telecommunications investment, we believe that the growth has been underpinned by demand for capital expenditure on 5G networks as well as equipment to work from home amid the pandemic," a government official was quoted as saying.

Orders from manufacturers, meanwhile, retreated 2.4 percent to 345.22 billion yen (3.31 billion U.S. dollars) in the recording period, marking the first decline in three months.

This comes on the heels of an 11.4 percent increase booked in October, the office said, with nonferrous metal makers contributing to the decline after previously logging gains.

The economic outlook, the government official explained, was now looking uncertain following Japan the previous day expanding a state of emergency declaration over the coronavirus to cover other areas beyond the Greater Tokyo region, where it was issued last week.

"The situation in the reporting month was good, but we need to closely monitor downside risks, which could materialize depending on the spread of the virus," said the official.

Machinery orders from overseas, a barometer of future exports, rose 5.9 percent to 978.54 billion yen (9.41 billion U.S. dollars), increasing for the second straight month, while those from the public sector edged up 0.4 percent to 249.29 billion yen (2.39 billion U.S. dollars), after tumbling 22.7 percent the previous month, the office's data showed.

Total machinery orders in the reporting period fell 1.5 percent to 2.27 trillion yen (21.83 billion U.S. dollars), after a 9.7 percent rise in October, the office said.

Machinery orders are a key advance indicator for corporate capital spending and the government uses the data to predict the strength of business spending in a six to nine month period ahead.

A rise in capital expenditure as is the case here can boost the economy as it means Japanese companies are producing more machinery to meet growing demands from overseas markets.

Such business investment accounts for roughly 15 percent of Japan's gross domestic product.

The types of machinery included in the monthly government survey comprise engines and turbines, heavy electrical machinery, electronic and communication equipment, industrial machinery, machine tools, railway rolling stock, road vehicles, aircraft, ships, water crafts, as well as sub types in those categories. Enditem

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