"The figures should ease concerns that the fledgling recovery in business investment has already come to an end"
- Marcel Thieliant, Capital Economics Japan Economist
After weaker-than-expected growth figures, falling output at nation's factories, as well as just slight improvement in consumer mood, Wednesday's report provides some relief to Shinzo Abe, as machinery orders ticked up in October. This can be interpreted as an upbeat sign that companies are still willing to invest, and business spending may be set to take on a greater role in driving the world's third largest economy in the final quarter. Core machinery orders, which is a leading indicator of domestic production, advanced 0.6% in the middle of autumn, squarely in line with analysts' forecasts, and up from a 2.1% contraction a month earlier. On a yearly basis, orders posted even more solid growth, rising by 17.8% over a period, and accelerating from a 15.0% gain logged in the prior month.
A solid gain in machinery orders is a positive sign that businesses putting funds into equipment and facilities, and will provide support to the economic amelioration, even despite earlier data suggested such investment might be waning already. Moreover, government survey showed that companies are likely to increase their spending on facilities and equipment by 12% in the 12 months ending in March from the same period a year earlier. This is the highest forecasts since records began.
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