TOKYO • Japanese machinery orders rose more than expected in June in a sign that companies are gradually becoming more willing to increase capital expenditure.
Companies also expect core machinery orders, a leading indicator of capital expenditure, to rise in the July-September period, suggesting that business investment is starting to stabilise after a rocky performance in the previous quarter.
Prime Minister Shinzo Abe has compiled a stimulus package that focuses on infrastructure, which should support capital spending heading into next year, but risks remain that overseas economic turmoil could curb investment.
Core machinery orders rose 8.3 per cent, well ahead of the median estimate for a 3.1 per cent increase, Cabinet Office data showed yesterday. Manufacturers’ orders rose 17.7 per cent, while orders from the service sector rose 2.1 per cent, the data showed. Manufacturers surveyed by the Cabinet Office forecast that core orders will rise 5.2 per cent in July-September, which compares with a 9.2 per cent decrease in April-June.
Forecasts for gains in machinery orders in July-September suggest that the economy could pick up from what is expected to be a subdued quarterly performance in April- June.
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