Japan Investment May 2021


Japan: Core machinery orders expands at quickest pace since October 2020 in May

July 12, 2021

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—rose 7.8% in month-on-month seasonally-adjusted terms in May, which was above April's 0.6% increase and marked the best result since October 2020.

On an annual basis, machinery orders rose at a quicker rate of 12.2% in May (April: +6.5% yoy), the best result since June 2019. Moreover, the trend improved significantly, with the annual average variation of machinery orders coming in at a one-year high of minus 5.0%, up from April's minus 6.9%.

FocusEconomics Consensus Forecast panelists project gross fixed investment to grow 1.5% in 2021, which is unchanged from last month’s estimate, and increase 2.5% in 2022.

Author:, Economist

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Japan Investment May 2021

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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