A record surge in Japan’s machinery orders in March to a six-year high suggests Japanese business investment may remain solid even after a sales tax increase seen as a major test for the pro-growth policies of Prime Minister Shinzo Abe.
While the higher-than-expected expansion in orders came largely from one-off demand from the manufacturing sector, economists say the outcome bodes well for the economy after the April tax increase and may also limit an expected downward revision of gross domestic product data.
Core machinery orders shot up 19.1% in March from a month ago, the sharpest jump on record, to Yen936.7 billion ($9.23 billion), the Cabinet Office said Monday. The order volume was the highest since June 2008, before the outbreak of the global financial crisis. The core data excludes shipping and power company orders due to their large size and volatility.