- July core orders -1.1% m/m vs f'cast -0.9%
- Orders from m'facturers -5.3%, biggest drop in 8 months
- Orders from service firms +1.3%
- Core orders -13.0% yr/yr vs f'cast -10.7%
TOKYO, Sept 14 (Reuters) - Japan's core machinery orders fell more than expected in July, as manufacturers in the world's third-largest economy balk at new investments in the face of sluggish global growth and weakness in major market China.
The Cabinet Office data released on Thursday comes on top of several other indicators over recent weeks that have raised the challenge for Japanese policymakers confronting soft demand overseas and at home.
Core orders, the leading indicator of Japanese business spending, were down 1.1% in July from the previous month, the data showed. The decline was bigger than a 0.9% drop expected by economists in a Reuters poll and followed a 2.7% gain in June.
Orders from manufacturers fell 5.3%, the largest decline in eight months, due to weak demand for computers from industries including electric machinery, auto and chemicals. Orders from "core" service-sector firms excluding shipping and electric utilities grew 1.3%.
On a year-on-year basis, core orders, a highly volatile data series regarded as a gauge of capital spending in the coming six to nine months, contracted 13.0%, larger than a forecast for a 10.7% fall, the data showed.
The government maintained its weak view on machinery orders, saying they are "stalling", highlighting the bumpy road ahead for Japanese business and its broader economy.
Confidence at big Japanese manufacturers fell the most in eight months, on worries a slowdown in China's economy could be a bigger drag on growth globally and at home, a Reuters corporate survey for September showed on Wednesday.
Japan's economy grew less than initially estimated in April-June, revised gross domestic product data showed last week, as both business and consumer spending shrank.
Japanese Prime Minister Fumio Kishida, after reshuffling his cabinet on Wednesday, said the government will support the economy by ensuring that wage growth exceeds inflation in longer-term. Real wages has fallen for 16 months through to July on rising inflation, complicating the Bank of Japan's monetary policy outlook.
Reporting by Kantaro Komiya Editing by Chang-Ran Kim
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Kantaro writes about everything from Japan's economic indicators to North Korea's missiles to global regulation on AI companies. His previous stories have been published in the Associated Press, Bloomberg, the Japan Times and Rest of World. A Tokyo native, Kantaro graduated from DePauw University in the United States and was the recipient of the Overseas Press Club Foundation 2020 Scholar Award.