- Marcel Thieliant, an economist at Capital Economics
Japan's machinery orders rose more than expected in March in a sign that Japanese companies may be increasing capital expenditure for future growth. Machinery orders are widely considered as a leading indicator of corporate capital investment. According to the Cabinet Office, core machinery orders increased 2.9% on month in March, compared with the 1.8% gain expected by analysts. Measured on an annualized basis, March orders rose 2.6%, better than the expected 2.0% rise, and following the 0.4% decline in the preceding month. For the January-to-March quarter, core machinery orders rose 6.3% on quarter, with data showing April-to-June core orders expected to fall 7.4% on quarter.
Meanwhile, a separate report showed Japan's industrial production declined for the second consecutive month in March, adding to signs the Japanese economy grew at a sluggish pace in the first quarter of the year. Combined output from Japan's mines, manufacturers, and utilities dropped 0.8% month-on-month in March, according to the final data from the Ministry of Economy, Trade, and Industry, following the 3.1% decrease in February. Economists, however, had expected a 0.3% fall. Measured on an annual basis, production declined 1.7% in the reported month, largely due to a 1.9% decrease in shipments.
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