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Japan’s core machinery orders slipped for the first time in three months in May, hurting hopes that a pickup in business spending would offset pressure on an economy struggling with surging costs of energy and other imports due to a weak yen.
Core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, lost 5.6 per cent in May from the previous month, posting their first drop in three months, Cabinet Office data showed on Monday, reports Reuters.
It was almost exactly in line with economists’ median estimate of a 5.5 per cent contraction and followed a 10.8 per cent jump in the previous month and a 7.1 per cent increase in March.
Japanese firms could delay spending due to persistent constraints in the supply of chips and parts and rising energy and raw material prices that have been aggravated by a weakening yen, sending wholesale inflation soaring.
“While businesses have a strong desire to invest, their actual capital spending has not increased a lot on a gross domestic product basis,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
(FE)
