- Norio Miyagawa, a senior economist at Mizuho Securities
Japan's machinery orders increased in September for the first time in four months, but firms predict modest gains in orders in the final quarter of the year, signalling the economy's rebound from the recession could be slow. Core machinery orders soared 7.5% in the reported month, beating economists forecast for a 3.3% gain, and following the 5.5% decline in August. Machinery orders, excluding ships and utility items plunged 10.0% in the third quarter, but were seen to pick up 2.9% in the three months through December. Policy makers are counting on increases in business investment to create new jobs, boost productivity and underpin growth. The machinery orders data indicates the Japanese government faces a challenge to persuade companies to invest.
The world's third biggest economy is likely to have slipped into technical recession in the third quarter due to a decline in capital spending as well as weak external demand and private consumption. The Japanese economy is predicted to have shrinken at an annualized rate of 0.2% in the October-December period, following a 1.2% contraction in the second quarter. Japan's GDP data is due November 16.
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