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Japan Investment March 2018

Japan: Machinery orders contract in March

Core machinery orders—a leading indicator of capital spending over a three to six month period—declined in March for the first time in three months. Headline machinery orders (private sector, excluding volatile orders) fell 3.9% in March from the previous month in seasonally-adjusted terms, contrasting the 2.1% rise in February. The print surprised to the downside as market analysts expected a softer 3.0% contraction. That said, the Cabinet Office kept its assessment unchanged, stating that “machinery orders show signs of picking up.”

Overall manufacturing orders posted a sharp decline in March, while non-manufacturing orders increased slightly. Export orders, on the other hand, contracted again in March, casting doubts on the strength of global demand.

Compared to the same month of the previous year, core machinery orders fell 2.4% in March, contrasting February’s 2.4% expansion. The annual average variation in core machinery orders slid from minus 0.6% in February to minus 0.8% in March.

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