Japan Investment May 2020


Japan: Core machinery orders bounce back in May

July 9, 2020

Core machinery orders—which cover the private sector, exclude volatile orders and are a leading indicator for capital spending over the coming three- to six-month period—increased in May for the first time in three months, confounding market analysts. Specifically, orders increased 1.7% versus the previous month in seasonally-adjusted terms, contrasting both the 12.0% decrease in April and the 5.4% decrease expected by market analysts.

On an annual basis, orders fell at the more moderate pace of 16.3% in May (April: -17.7% year-on-year). Meanwhile, the trend pointed down, with the annual average variation coming in at minus 2.9%, down from April's minus 2.0%.

FocusEconomics Consensus Forecast panelists see gross fixed investment decreasing 6.6% in 2020, which is up 0.5 percentage points from last month’s projection. In 2021, the panel sees gross fixed investment growing 2.2%.

Author:, Economist

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Japan Investment May 20 20

Note: Month-on-month changes of seasonally adjusted core machinery orders and year-on-year growth rate in %.
Source: Ministry of Economy, Trade and Industry (METI) and FocusEconomics calculations.

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