Japan Investment September 2019


Japan: Machinery orders contract for third consecutive month in September

November 11, 2019

Core machinery orders, a leading indicator for capital spending over a three- to six-month period, contracted for the third month in a row in September. September’s drop prompted the government to downgrade its assessment on the indicator, stating that “a pick-up is seen stalling in machinery orders.” Headline machinery orders (private sector, excluding volatile orders) declined 2.9% over the previous month in seasonally-adjusted terms in September, following the 2.4% drop in August. The print contrasted the 0.9% increase expected by market analysts.

Compared to the same month of the previous year, core machinery orders rose 5.1% in September, contrasting August’s 14.5% plunge. The annual average variation in core machinery orders swung from a 1.1% decline in August to a 0.1% increase in September.

FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 0.7% in 2020, which is down 0.1 percentage points over last month’s projection. In 2021, the panel sees gross fixed investment growth at 1.1%.

Author: Ricard Torné, Lead Economist

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Japan Investment September 2019

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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