Japan’s core private-sector machinery orders grew by 3.8 percent in October, marking the first increase in three months as the country’s economy continues to recover from the pandemic.
Core machinery orders, which disregard those for ships and from electric power companies due to volatility, came to 870.8 billion yen ($7.67 billion) in October, according to the Cabinet Office data released on Monday.
Orders from the manufacturing sector declined by 15.4 percent to 393.8 billion yen ($3.47 billion) in October, despite the sector showing an increase of 24.8 percent in the previous month.
Orders from the non-manufacturing sector, which exclude volatile orders, rose 16.5 percent to 469.3 billion yen ($4.13 billion) from the 402.7 billion yen ($3.55 billion) in September.
The total value of machinery orders received by 280 manufacturers operating in Japan rose 24.9 percent to 2,965.5 billion yen ($26.1 billion) in October from the previous month, according to the Cabinet Office data.
Orders from overseas increased by 17.2 percent to 1,298.6 billion yen ($11.44 billion), following a 14.2 percent decline in the earlier month.
Whilst orders from the public sector showed a sharp increase as compared to the previous month, with an increase of 46.4 percent to 323.5 billion yen ($2.85 billion) in October.
Meanwhile, capital expenditure by companies in Japan increased 1.2 percent in the July-September period, marking the second straight quarter of year-on-year gains, according to the Ministry of Finance data on Dec. 1. [Reuters]
The data, which will be used to calculate revised gross domestic products, showed business spending, recurring profits, and sales all declined from the previous quarter on a seasonally adjusted basis.
“Corporate expenditure rose compared to the same period in the previous year, but it fell from the prior quarter reflecting the spread of infections and growing uncertainty about the outlook,” a government official said.
The Japanese Central Bank is expected to debate on whether to extend its funding program for companies beyond the current March 2022 deadline at a two-day policy-setting meeting from Thursday.
The Bank of Japan is inclined towards reducing purchases of corporate bonds and commercial paper issued by large companies due to the improvement in their funding conditions, but the details are yet to be confirmed, sources familiar with the matter said on Dec. 10.
The central bank is also considering scaling back its funding scheme for smaller firms, though a portion of it could be extended beyond March to keep supporting retailers still struggling with weak consumption, the sources said.
Last year, the BOJ expanded the purchases of corporate bonds and commercial paper to 20 trillion yen ($176 billion) and pumped 80 trillion yen into its economy through the purchase of government bonds.
Reuters contributed to this report.