TOKYO- Japan’s core machinery orders unexpectedly rose in April, at the fastest pace in 18 months, as business spending remained defiantly robust against higher energy prices and China’s COVID-19 lockdowns.
The surge in the closely watched barometer of business investment bodes well for Japan’s corporate sector and the broader economy, which faces global inflation and a rapid yen decline to 24-year-lows.
Core machinery orders, a highly volatile data series considered an early indicator of capital expenditure, grew 10.8 percent in April from the previous month, marking the biggest monthly growth since October 2020, the Cabinet Office data showed on Wednesday.
It was far stronger than economists’ median forecast for a 1.5 percent dip and followed a 7.1 percent jump in March.
“It was a strong figure despite concerns about global supply chains such as the Ukraine war and China’s lockdown, as well as inflationary pressures on profits,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Machinery orders from manufacturers rose 10.3 percent, led by electronic machinery, information technology and auto sectors, according to the data.
“Sectors related to the semiconductor-making equipment carried on active investments, while carmakers turned more positive” in April, a government official told a press briefing.
KazumaKishikawa, economist at Daiwa Institute of Research, said key industries, such as auto and other transport equipment makers, had likely resumed investments postponed from January-February on signs China’s COVID-19 infections were peaking.
