Japanese Machine Orders Drop

apan’s core machinery orders fell more than expected and a central banker warned of headwinds from soft overseas growth, underscoring the difficulties of sustaining the economic recovery Prime Minister Shinzo Abe’s stimulus policies generated.

Board member Ryuzo Miyao stressed the Bank of Japan’s readiness to loosen monetary policy again should the global economy and domestic wages fail to pick up, forcing a change to the central bank’s upbeat economic forecasts.

“I see risks somewhat tilted toward the downside for both the economy and prices,” said Miyao, who is among those in the nine-member board relatively pessimistic about the outlook.

“If the BOJ were to act again, it won’t rule out any policy steps in advance,” he told a news conference on Wednesday after meeting with business leaders in Matsumoto, northwestern Japan.

Miyao’s comments came after data showed core machinery orders, a volatile series regarded as a leading indicator of capital expenditure, fell 2.1 percent in September, more than a median market forecast for a 1.4 percent drop.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza