Japan’s core machinery orders, a leading indicator of capital spending, rose for the second straight month in July but fell short of expectations. Core machinery orders rose 3.5 percent on month, below expectations for a 4.0 percent rise in a Reuters poll and down from an 8.8 percent rise in June, government data showed on Wednesday.
On a year-on-year basis machinery orders rose 1.1 percent, better than expectations for a 0.6 percent rise and up from a 3 percent decline in June. “[While] we had expected a 5 percent increase month-on-month today’s result is not pessimistic,” said Junko Nishioka, chief Japan economist, RBS Securities Japan. “Japanese manufacturers are retrieving a growth trend in the second half of this year.”
The figures came after Japan revised its second quarter gross domestic product (GDP) reading lower on Monday. The revised figure showed the economy contracted an annualized 7.1 percent, worse than an initial reading of 6.8 percent, marking the biggest contraction since the first quarter of 2009 as a hike in the consumption tax dragged economic growth.