A little bit of good news for Japan today as a popular proxy of capital expenditure rebounded from its fastest rate of contraction in a year-and-a-half.

Machine orders grew by 8.3 per cent month-on-month in June, up from a 1.4 per cent contraction in May, and above economists forecasts for 3.2 per cent growth.

Year-on-year, growth in orders contracted 0.9 per cent in June, but this was a vast improvement on the 11.7 per cent contraction posted in the previous month, which registered the weakest pace since November 2014.

That makes June’s pace the best since March, when orders grew 3.2 per cent. Economists had forecast a 4.5 per cent contraction.

Machine orders are a popular, albeit volatile, proxy for capex.

Yesterday, preliminary data for machine tool orders suffered a sharp drop, down 19.6 per cent year-on-year, and fell for a 12th-straight month.

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