— Japan June Core Machine Orders +5.6% M/M; MNI Fcast +11.2%
— Japan Q2 Core Machine Orders -4.1% Q/Q; Q3 Seen -1.2%
— Japan Govt Cuts View: Machine Order Showing Ups and Downs
— Japan Q2 Core Machine Orders Post 1st Q/Q Drop in 2 Quarters
— Japan June Core Machinery Orders-9.9% Y/Y Vs May +1.0%
— Japan June Machine Orders From Overseas -9.8% M/M; May +0.3%
TOKYO (MNI) – Japan’s core private-sector machinery orders staged a
modest rebound in June after a sharp drop in May, showing some
resilience against the global slowdown thanks to solid domestic demand,
data from the Cabinet Office showed on Thursday.
But the leading indicator of business investment, which accounts
for nearly 15% of the economy, is poised to mark a second straight
quarterly drop in July-September amid uncertainties about global growth
and sustainability of domestic demand supported by fiscal programs.
Core orders — which exclude volatile demand from electric
utilities and for ships — rose 5.6% in June, the first rise in two
months, following a 14.8% slump in May and a 5.7% rise in April.
But the June figure came in much lower than the median forecast in
an MNI survey of economists for a 11.2% rise.
In April-June, core orders marked the first drop in two quarters,
down 4.1% from January-March and below the government’s forecast for a
2.5% increase.
In the July-September quarter, core orders are projected to decline
further by 1.2%.
The Cabinet Office downgraded its assessment, saying that
“machinery orders are now showing ups and downs.” In the previous
month’s report, it said that “machinery orders are rising gradually.”
Economists have warned of downside risks to Japan’s recovery in the
face of slower global demand as well waning effects of government
subsidies for buying low-emission vehicles and building energy-saving
homes, which have spurred domestic demand.
The pace of year-on-year growth in new vehicle sales slowed to
36.1% in July from 40.9% in June, 66.3% in May and 92.0% in April.
In December the government revived subsidies for buying
low-emission vehicles. The program had been terminated in September
2010, which caused a year-long stagnation of domestic vehicle sales.
However, because the program is running out of money due to strong
demand, it may be terminated again in August, one month earlier than
expected.
Until recently housing construction was supported by the
government’s revived temporary reward program for buying energy-saving
houses but the program is being terminated a few months earlier than
planned.
The land ministry has stopped receiving applications for reward
points, which are given to owners of greener homes under construction or
those being renovated to save energy consumption, except for those who
live in the earthquake-hit areas.
From a year earlier, core private machinery orders fell 9.9% in
June following a 1.0% gain in May.
Offshore orders, which are not part of core orders, dropped 9.8%
from the previous month in June, marking the first fall in three months,
after a 0.3% gain in the previous month.
tokyo@marketnews.com
** MNI Tokyo Newsroom: 81-3-5403-4835 **
[TOPICS: M$J$$$,M$A$$$,MAJDS$,MT$$$$]
