Bottom in sight for Japanese economy
By Tetsushi Kajimoto |
April 9, 2010, Friday
|
Print Edition
Print Edition
JAPANESE core machinery orders fell unexpectedly in February, the second month of declines, but they appeared to be bottoming out, pointing to a further improvement in economic growth.
Underlining the view that the economy is slowly on the mend from its worst recession in decades, corporate bankruptcies fell for the eighth month and sentiment in the service industries hit its highest in three years.
In addition, the current account surplus rose almost a third from a year earlier due to a record annual gain in exports, driven by rising shipments to China.
Analysts said the surprise drop in core machinery orders, a highly volatile series and a leading indicator of capital spending, may be a one-off, adding that they have bottomed out.
"There's no need to alter the view that machinery orders are turning towards a moderate recovery even though the negative surprise was caused by sluggishness among non-manufacturers," said Yoshimasa Maruyama, an economist at Itochu Corp.
"But recovery in overall orders is unlikely to pick up at least until later this year as non-manufacturers are hit hard by deflation and lagging behind manufacturers who can benefit more from exports."
Core private-sector machinery orders fell 5.4 percent in February, against a median forecast for a 3.7 percent rise.
The core orders, which exclude those for ships and machinery at electric power firms, were 7.1 percent lower than February last year.
Orders from manufacturers fell 0.3 percent, with materials industries such as steel and chemicals putting a drag on the figure. Orders from non-manufacturers fell 4 percent due to lower orders from wholesalers, retailers and information services.
Japan had a spotty recovery from recession, but economists say exports are likely to underpin growth this year.
Underlining the view that the economy is slowly on the mend from its worst recession in decades, corporate bankruptcies fell for the eighth month and sentiment in the service industries hit its highest in three years.
In addition, the current account surplus rose almost a third from a year earlier due to a record annual gain in exports, driven by rising shipments to China.
Analysts said the surprise drop in core machinery orders, a highly volatile series and a leading indicator of capital spending, may be a one-off, adding that they have bottomed out.
"There's no need to alter the view that machinery orders are turning towards a moderate recovery even though the negative surprise was caused by sluggishness among non-manufacturers," said Yoshimasa Maruyama, an economist at Itochu Corp.
"But recovery in overall orders is unlikely to pick up at least until later this year as non-manufacturers are hit hard by deflation and lagging behind manufacturers who can benefit more from exports."
Core private-sector machinery orders fell 5.4 percent in February, against a median forecast for a 3.7 percent rise.
The core orders, which exclude those for ships and machinery at electric power firms, were 7.1 percent lower than February last year.
Orders from manufacturers fell 0.3 percent, with materials industries such as steel and chemicals putting a drag on the figure. Orders from non-manufacturers fell 4 percent due to lower orders from wholesalers, retailers and information services.
Japan had a spotty recovery from recession, but economists say exports are likely to underpin growth this year.
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