Japan’s Machinery Orders Decline for the First Time in Five Months

The Japanese Cabinet Office announced today that sales of basic machinery fell in January for the first time in five months. This is a worrying sign for the Japanese economy, which is coming under increasing pressure from the Ukraine war. In addition, higher energy and raw material prices are causing problems.

New orders for basic machinery, excluding machinery for the shipbuilding industry and electric utilities, fell 2.0% in January from December to 8.996 billion yen ($7.6 billion).

Machinery orders are an indicator of business capital spending, which increased by 3.1% in December 2021.

The decline in orders for basic machinery dampened expectations that the recovery in corporate spending will support private sector demand in Japan. Companies are facing skyrocketing raw material prices, shortages of chips and supply disruptions.

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