Japan Investment October 2018


Japan: Machinery orders recover in October from September's plunge

December 12, 2018

In October, core machinery orders, a leading indicator for capital spending over a three- to six-month period, rebounded following September’s sharp contraction, which had represented the steepest fall since records began in 1987. The dismal performance in September reflected a strong earthquake and a typhoon. Headline machinery orders (private sector, excluding volatile orders) rose 7.6% in October from the previous month in seasonally-adjusted terms, contrasting the 18.3% decrease in September. The print missed the 10.5% gain expected by market analysts.

Both manufacturing and non-manufacturing orders rebounded in October as did export orders.

Compared to the same month of the previous year, core machinery orders rose 4.5% in October, contrasting September’s 7.0% decline. The annual average variation in core machinery orders rose from 3.2% in September to 3.3% in October.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 2.5% in 2019, which is unchanged over last month’s projection. In 2020, the panel sees private non-residential investment expanding 1.6%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 2.0% in 2019, which is unchanged over last month’s projection. In 2020, the panel sees gross fixed investment growth at 0.9%.


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Japan Investment Chart

Japan Investment October 2018

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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