Japan Investment June 2017


Japan: Weak machinery orders in June

August 10, 2017

Core machinery orders (a leading indicator of capital spending over a three- to six-month period) declined for the third consecutive month in June, casting doubts about the strength of firms’ capital spending in the months to come. Headline machinery orders (private sector, excluding volatile orders) fell 1.9% in June from the previous month in seasonally-adjusted terms, which followed the 3.6% decrease in May. The June print, although more moderated than May’s decline, substantially contrasted the 3.6% increase that the market had expected.

Overall manufacturing orders declined in June, contrasting May’s rise, while non-manufacturing books rebounded. Export orders declined in June over the same period, albeit at a slower pace than in May.

Compared to the same month of the previous year, core machinery orders fell 5.2% in June, which contrasted May’s 0.6% increase. The annual average variation in core machinery orders fell from 2.3% in May to 1.9% in June.

FocusEconomics Consensus Forecast panelists expect private non-residential investment to rise 3.3% in 2017, which is unchanged over last month’s projection. In 2018, the panel sees private non-residential investment expanding 2.1%. In addition, FocusEconomics Consensus Forecast panelists expect gross fixed investment to increase 2.3% in 2017, which is unchanged from last month’s projection. In 2018, the panel sees gross fixed investment growth at 1.6%.

Author:, Economist

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Japan Investment June 2017 1

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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