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Japan Investment January 2023

Japan: Core machinery orders grow at fastest pace since October 2020 in January

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 9.5% in month-on-month seasonally-adjusted terms in January, which was above December’s 0.3% increase. The figure marked the best reading since October 2020 and was far in excess of market expectations.

On an annual basis, machinery orders rose 4.5% in January, contrasting December’s 6.6% fall. Meanwhile, annual average growth in machinery orders was stable at December’s 5.2% in January.

Last month, the statistical office forecast that core machinery orders would rise by 4.3% quarter on quarter in Q1. The January print further suggests that fixed investment will rebound in Q1 2023 after contracting in Q4 2022.

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