Japan: Machinery Orders Show Surprise Surge

June 13th, 2012
in econ_news

Econintersect: While the rest of the world struggles against economic slowdown Japantides, Japan is riding the crest of a wave. First, less than a month ago first quarter GDP came in at a surprising 4.1% annual growth rate. Tonight machinery orders in April 2012 were reported to have surged by 5.8% (according to Reuters, others have 5.7%). This was a big surprise since 2.1% (Reuters) or 1.5% (BBC) gain had been expected following a disappointing 2.8% decline in March. Reuters says the data supports the Bank of Japan's view that robust domestic demand will help the country's economy toward a moderate recovery.

Follow up:

Reuters also cites reasons why a robust Japanese economy going forward is not a slam dunk:

But policymakers have little to cheer about with the outlook clouded by a stubbornly strong yen, slowing Chinese growth and market jitters over Europe's debt crisis.

"Corporate profits are gradually picking up but capital spending is increasing at an even faster rate, partly helped by reconstruction demand," said Junko Nishioka, chief economist at RBS Securities in Tokyo.

"But considering the recent cautious mood in business sentiment, it's hard to predict that capital spending will gain further momentum."

It also should be noted that machinery orders has been a very volatile metric as shown in the following graph from Bloomberg. It is best not to put too much emphasis on any one month number. After all the ups and downs the last year has seen an average monthly gain of just 0.86%.


Other sources (BBC for example) also concentrated on the strong yen as a particular problem for Japan. The Japanese currency continues to soar, as shown in the following graph from Google Finance:


The yen has increased in value against the U.S. dollar by approximately 50% over the past five years.

John Lounsbury


Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

 navigate econintersect.com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved