January Machinery Orders Jump 19.6 Pct
Monday March 10, 2:32 am ET
Japan Machinery Orders Mark Biggest Jump in 7 Years, but Economists Still Wary of Outlook
TOKYO (AP) -- Japanese core machinery orders -- a key indicator of capital spending -- jumped 19.6 percent in January from the previous month, marking their biggest percentage rise in more than seven years, the government said Monday.
While that was much higher than the 3.1 percent rise projected by economists and the first increase in three months, analysts cautioned that January's rise gain was due to several one-time large deals.
"The result is too strong and shouldn't be taken too optimistically," said Shiko Research Institute economist Norio Miyagawa. "Orders growth may continue, but its speed will likely decrease ahead with larger downside risks" due to a slowdown in the U.S. economy.
Machinery orders are widely regarded as a leading indicator of corporate capital investment, which accounts for about 15 percent of Japan's gross domestic product.
The figures showed their sharpest climb since August 2000, when they rose 20.8 percent, the Cabinet Office said. Core orders slipped 3.2 percent on month, following a 2.8 percent decline in November. Core orders exclude those from electric power companies and those for ships, which are often a source of volatility in the overall data due to their large sizes.
Unadjusted core orders in January climbed 11.4 percent from a year earlier.
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