Majority of Japanese companies appear unwilling to spend, latest government data showed on Wednesday, adding to doubts over the economy’s ability to recover amid slowing growth across the world, particularly in China.
Core machinery orders, a leading indicator of capex spending, grew 1.3 percent on-month in November, a reversal from October’s 6.4 percent decline, but well below expectations for a 5.0 percent rise in a Reuters poll.
Year-on-year, machinery orders dropped 14.6 percent, below the Reuters poll estimate of a 5.8 percent decline. At the same time, the Cabinet Office cut its assessment of machinery orders, citing signs that the economic recovery is stalling, Reuters reported.
“Many Japanese corporations don’t want to invest because they don’t think they can make any money in Japan,” said Taro Saito, director of economic research at NLI Research Institute. “The trend to hoard cash rather than invest is not good for the wider Japanese economy.”
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