Japan Investment March 2022


Japan: Core machinery orders rebounds in March

May 19, 2022

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—expanded 7.2% in month-on-month seasonally-adjusted terms in March, which contrasted February's 9.8% decrease. March's figure marked the best result since October 2020.

On an annual basis, machinery orders rose at a faster rate of 7.6% in March (February: +4.3% yoy). Accordingly, annual average machinery orders growth rose to 9.3% in March (February: +8.0%). This signals an improving trend in the sector.

The statistical release also provided an official forecast for growth of core machinery orders in Q2. It forecast that core machine orders would fall 8.1% in seasonally-adjusted quarter-on-quarter terms. Growth of core machine orders in Q2 is likely to be restrained by the Ukraine crisis and Covid-19 turmoil in China.

FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 0.6% in 2022, which is down 0.6 percentage points over last month’s projection, and grow 2.2% in 2023.


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Japan Investment March 2022

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).

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