Japan’s core machinery orders slipped for the first time in three months in May. Hurting hopes that a pickup in business spending would offset pressure on an economy struggling; with surging costs of energy and other imports due to a weak yen.
Core orders a highly volatile data series regarded as an indicator of capital spending in the coming 6 to 9 months; lost 5.6% in May, posting their first drop in three months, Cabinet Office data showed on Monday.
It was almost exactly in line with economists’ median estimate of a 5.5% contraction and followed a 10.8% jump. Japanese firms could delay spending due to persistent constraints in the supply of chips, parts, rising energy and raw material prices.
Compared with a year earlier, core orders, which exclude volatile numbers from shipping and electric power utilities; gained 7.4% in May, the data found.
By sector, orders from manufacturers contracted 9.8% month-on-month, weighed by electrical machinery; while those from non-manufacturers saw a 4.1% decline; pulled down by a drop in orders from the transportation and postal sub-sector.
The government kept its assessment on machinery orders unchanged, saying they were showing signs of picking up.
The world’s third-largest economy faces headwinds from soaring import costs and a heavy-handed pandemic response in China, which could hurt consumption and output in the quarter.
-Reuters.
