Japanese Core Machinery Orders Still in Decline, While Business Outlook Among Manufacturers Still Pessimistic - Forex News by Strategia Forex
Core machinery orders

Japanese Core Machinery Orders Still in Decline, While Business Outlook Among Manufacturers Still Pessimistic

Posted Thursday, October 10, 2019 by
Arslan Butt • 1 min read

Data released by the Cabinet Office reveals that core machinery orders in Japan declined for the second straight month in August on account of the escalating US-China trade war and the slowdown in global economic growth. Japan’s core orders fell 2.4% lower in August vs. the 6.6% decline seen in July and 2.5% fall expected.

Although a very volatile data, core machinery orders is a key indicator which gives a picture of capital spending plans for the next six to nine months. Core orders excluding ships and electricity fell 14.5% lower YoY in August. This is the steepest yearly decline seen since November 2014.

The business outlook among Japanese companies also seems bleaker, especially in the manufacturing sector. According to the recent Reuters Tankan survey, business sentiment index for the manufacturing sector is expected to climb to -5 in October from -7 in September, but still remains in the negative territory indicating pessimism. On the positive side, the business sentiment among Japanese services sector is expected to rise to +25 in October from +19 in the previous month, mostly boosted by the rush among consumers to beat the sales tax hike which was implemented starting from October 1.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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