"If exports pick up, capital spending will start to take off. We may gradually see companies increasing expenditures from around summer or autumn"
- Takeshi Minami, chief economist at Norinchukin Research Institute
Japan's core machinery orders jumped more-than-expected, increasing a seasonally adjusted 14.2% to 793.1 billion yen in March from February, the fastest monthly pace in 8 years, as companies have become more confident about investing in equipment amid a weaker Yen and surging stock prices. The gauge overshot economists' estimation of a 3.5% increase following a downwardly revised 4.2% rise in February. On an annual basis core machine orders rose as much as 2.4%, surpassing expectations of a 4.9% decrease following the 11.3% decline a month earlier. The total number of machinery orders, including volatile ones for ships and from electric power companies, added 27.8% month-on-month and 11.2% year-on-year in March to 2,361.8 billion yen.
"If exports pick up, capital spending will start to take off. We may gradually see companies increasing expenditures from around summer or autumn," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
"There's a lot of hope about Abenomics pulling Japan out of deflation. That has led to a weak yen which may boost corporate profits. But companies won't start to increase capital expenditures unless export volumes begin to increase, which hasn't begun yet."
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