TOKYO- Japan’s core machinery orders rose for the third straight month in May, a welcome sign for an economy struggling to overcome the hit from the coronavirus pandemic.
The government imposed a new state of emergency in Tokyo that will run through to Aug. 22 in an attempt to control the health crisis, clouding the outlook for the economy even as activity in many other countries rebounds.
The jump in core orders indicates a modest revival in corporate spending, seen by policymakers as necessary to accelerate Japan’s tepid recovery.
Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, jumped 7.8 percent in May from the previous month, beating a 2.6 percent expansion forecast by economists in a Reuters poll and compared with a rise of 0.6 percent in April.
“The data confirmed a recovery in capital spending by manufacturers,” said Atsushi Takeda, chief economist at Itochu Economic Research Institute.
“But while non-manufacturers saw quite a big rebound in orders, their starting point was different. They haven’t seen a recovery in conditions yet.” – Reuters
