"Japan's economy is making steady progress towards achieving the BoJ's 2%price target"
- Haruhiko Kuroda, BoJ Governor
The Yen is steadily depreciating against the U.S. Dollar, with the currency pair hovering slightly below 105. Even though on Thursday the Yen erased some of its earlier losses, the overall trend should be welcomed by the Japanese government and the central bank that both seek for a weaker domestic currency.
Japan is an export-oriented country, and strong production is vital for it. Therefore, a strong pick-up in core machinery orders provides signs that Shinzo Abe's growth strategy is paying dividends. A report from the Cabinet Office indicated core machinery orders, which exclude ships and utilities, ballooned 9.3% in November from October's 0.6% gain and surpassed analysts' estimations for a 1.2% growth. On a yearly basis orders rocketed 16.6%, also outpacing forecasts. This indicator is considered to be a early sign of economic growth, as companies build up capital to meet stronger demand. While machinery orders is a highly volatile indicator, November's figures are definitely reflecting success of government's policies that are aimed at reviving growth in the world's third largest economy.
Following the data BoJ Governor Kuroda seized the opportunity to praise changes, which are happening in the economy, underlining his confidence the country will reach the 2% inflation as planned.
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