Japan Core Machinery Orders Fall Most Since ’98 in Abe Challenge
Japan’s core machine orders fell in December the most since 1998, signaling business investment growth could slow in coming months and weigh on a recovery in the world’s third-biggest economy.
Core orders fell 15.7 percent from the previous month, the Cabinet Office said in Tokyo today, compared with the median estimate of a 4 percent decline in a Bloomberg survey of 31 economists. The fall partly reflected a pullback from a gain in November, when there was a big order that exceeded 10 billion yen ($97.6 million), according to the Cabinet Office.
With a sales-tax increase in April forecast to trigger an economic contraction in the second quarter, weakness in private capital expenditure would add to headwinds for Prime Minister Shinzo Abe as he tries to drive a sustained recovery from 15 years of deflation. While machine orders are a volatile indicator, swinging between gains and declines, the drop was steeper than all forecasts in the Bloomberg survey.
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