Machinery Orders for March - Japan
+5.5% m/m
- expected -2.0%, prior -9.2%
+3.2% y/y
- expected +0.8%, prior -0.7%
Yesterday we got great GDP data from Japan, but one of the details that was disappointing was business spending (capex).
But here we have Core Machinery Orders for March beating prior and expected, by quite a bit. This is a better sign for capex and is another indication that the Japanese economy is perhaps picking up a bit of steam.
A couple of notes of caution...
This is a crazy volatile data set; here is the y/y data (the m/m is just nuts):
Also, the earthquakes in April will weigh on economic growth in Q2 (that data is a good way off, we just got Q1 yesterday).
What does it all mean for BOJ policy?
The bank will be happy with the GDP numbers yesterday and this report today ... BUT ... yesterday's deflator showed inflation is still a long way from target. The BOJ still has work to do.