A worker stands on a crane which is parked at a construction site at Keihin industrial zone in Kawasaki, south of Tokyo, in this June 13, 2012 file photo. REUTERS/Toru Hanai/Files
April 5, 2019
TOKYO (Reuters) – Japan’s core machinery orders likely rose for the first time in four months in February, a Reuters poll showed on Friday, but weak external demand and the U.S.-China trade war continue to cloud the outlook.
Core machinery orders, a volatile data series regarded as an indicator of capital spending in the following six to nine months, likely grew 2.5 percent in February from a month earlier, the poll of 17 economists showed.
In January, orders dropped 5.4 percent from the previous month.
To economists, the anticipated gain in February is not strong enough to change a trend of lackluster core machinery orders, which exclude those for ships and electric power utilities.
“Uncertainty over the economic outlook has risen globally and firms are cautious about investment, especially high-tech companies,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
Compared with one year earlier, core orders in February are expected to have fallen 5.2 percent in February, according to the poll.
The trade friction between the United States and China is a major risk for Japan, as it ships electronics parts and heavy machinery to China as well as makes finished products for the United States and other markets.
The Cabinet Office will announce the machinery orders data at 8:50 a.m. Wednesday, April 10, Tokyo time.
The Reuters poll also showed an expectation that Japan’s current account likely had a surplus of 2.68 trillion yen ($24.00 billion) in February after 600.4 billion yen in January.
A weak yen likely inflated income from investments overseas, which contributed to a wider payments surplus, analysts said.
The finance ministry will release the February current account balance at 8:50 a.m. Tokyo time on April 8.
The poll also showed the Bank of Japan’s corporate goods price index (CGPI), which measures the prices companies charge each other for goods and services, increased 1.1 percent in March from a year earlier, after a 0.8 percent gain in February.
Price gains in oil-related items and chemical products lifted the index, analysts said.
($1 = 111.66 yen)
(Reporting by Kaori Kaneko; Editing by Richard Borsuk)