Japan’s machinery orders plunge; project murky view for capital spending
September had seen Japan’s core machinery orders dropped for the first time in three months, with their momentum decelerating faster than what was expected. This brought in concerns that any pickup in business spending would not be effective in staging a brisk economic recovery.
Core machinery orders recorded a 44% contraction in September. This followed after a 0.2% increase monitored in August. More so, the record came to be the first monthly drop since June, placing above the 0.7% decline predicted by economists in a Reuters survey.
The contraction in core orders highlighted corporate Japan’s hesitation to commit to larger capital investments. Japan’s reluctance could be attributed to a murky outlook for global demand brought by an increase in new coronavirus infections.