A Key business indicator: Japan’s Machinery orders rise 20.1% in December

Private sector machinery orders increased a seasonally adjusted 20.1% in December from a month earlier to US$8.3B according to a report released by the Cabinet Office on Wednesday.

The total value of machinery orders received by 280 manufacturers operating in Japan increased by 21.2 % in December from the prior month on a seasonally adjusted basis.

In the October to December Q the value of orders rose 7.8%  in comparison to the preceding Q and the volume of orders climbed 0.5% in the same period.

In fiscal Y 2009 the total volume of new machinery orders decreased by 31.8%.

Also private-sector orders, excluding volatile ones such as those for ships and from electric utilities, fell by 26.9%, the Cabinet Office said in the report. However, the Cabinet Office forecast orders will rise 2% in the Q ending March 31, meaning the government sees corporate capital spending on the rise.

If that is indeed the case, this is a Key indicator of embryonic economic recovery and a signal that the government’s stimulus measures, components of which were aimed specifically at boosting business investment by small and medium sized companies, are producing encouraging results. —Paul A. Ebeling, Jnr. www.livetradingnews.com

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