Japan’s machinery orders, a sometimes volatile proxy for the corporate sector’s willingness to invest, returned to growth in December and at a markedly higher pace than anticipated.
Core machine orders – excluding ships and utilities orders – grew 6.7 per cent month on month in December after falling 5.1 per cent in November. A median forecast from economists surveyed by Reuters had predicted a rise of just 3.1 per cent.
The year-on-year growth rate came in at 6.7 per cent after rebounding to 10.4 per cent growth in November. Despite deceleration the annualised rate was still nearly 2 percentage points higher than expected growth of 4.6 per cent.
The unexpectedly strong rebound in month-on-month growth exceeded even a 4 per cent forecast from Marcel Thieliant, senior Japan economist at Capital Economics, who before the data release suggested a likely rise at that rate would “corroborate our forecast that business investment started to recover last quarter”.