Japan machinery orders jump in August

AP News
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Posted: Oct 13, 2010 12:36 AM
Japan machinery orders jump in August

Japan's machinery orders, a closely watched indicator of future business investment, unexpectedly jumped due to one-time purchases in August, marking the third straight month of growth, the government said Wednesday.

Japan's core machinery orders in August rose 10.1 percent from the previous month to 843.5 billion yen (US$10.3 billion), the Cabinet Office said. The August result was far better than a 4.0 percent drop projected by economists.

The figure excludes volatile numbers from shipbuilders and electric power companies.

Hiroshi Watanabe, economist at Daiwa Institute of Research, said a surge in August machinery orders was due to one-time purchases including massive orders for chemical and nuclear plant equipment.

"It is too early to say machinery orders are recovering strongly. The August figure was boosted by one-off factors. Companies remain cautious about making big investments amid uncertainty over a global economic recovery," he said.

Orders from manufacturers grew 12.5 percent, while those from non-manufacturers climbed 8.3 percent in August.

But overseas demand, an indicator of prospects for Japanese exports, fell 3.7 percent in August amid cooling demand abroad. The figure marked the first drop in four months, the government said.

In the three month period to September, the Cabinet Office has predicted machinery orders will rise 0.8 percent from the previous quarter.