Japan's June machinery orders decline 1.5 pct, 1st drop in 4 months

TOKYO, Aug. 18 (Xinhua) -- Japan's core private-sector machinery orders declined 1.5 percent in June from the earlier month for the first time in four months, while momentum toward rebound from the fallout of the COVID-19 pandemic continued, government data showed Wednesday.

The orders, excluding those for ships and from electricity utilities due to their volatility, totaled 852.4 billion yen (7.8 billion U.S. dollars), according to the Cabinet Office.

The Cabinet Office kept its evaluation that machinery orders, considered as a leading indicator of corporate capital spending, are reflecting "signs of picking up," which is adopted in the previous month. In May, the office revised upward the assessment for the first time in five months.

"When we look at the breakdown, orders from both manufacturers and nonmanufacturers kept increasing and the three-month moving average was also in the plus column. The recovery trend has not changed," a government official said.

Machinery orders from manufacturers climbed 3.6 percent to 403.9 billion yen (3.7 billion U.S. dollars), up for the third straight month. Sectors such as production machinery as well as information and communication electronics equipment contributed to the increase, as demand for electronic parts and semiconductors is continuing.

Orders from non-manufacturers went up 3.8 percent to 470.5 billion yen (4.3 billion U.S. dollars), rising for the second consecutive month, with strong demand from the construction as well as wholesale and retail sectors, showing expansion on the building of distribution bases for both e-commerce and traditional shops, the official said.

On a quarterly basis, core orders gained 4.6 percent in the April-June period, following a 5.3 percent drop in the earlier three months. The orders are expected to rise 11.0 percent in the July-September period.

Manufacturers are forecast to stimulate capital spending connected to digitalization and green technology, the official said.

In the reporting month, orders from abroad, seen as an indicator of future exports, slipped 10.0 percent to 1.2 trillion yen (11.0 billion U.S. dollars), declining for the first time in three months.

Those from the public sector dropped 2.8 percent to 257.6 billion yen (2.4 billion U.S. dollars) after a 3.1 percent rise. Total orders plunged 6.6 percent to 2.6 trillion yen (23.7 billion U.S. dollars).