Orders for machinery increased in July. This raises hopes that higher corporate spending can offset the effects of the global economic slowdown and the depreciation of the yen. In the past, the devaluation of the yen led to higher operating costs for Japanese companies.
According to the Japanese Cabinet Office, orders for basic machinery (excluding machinery for the shipbuilding industry and electric utilities) rose 5.3% in July from the previous month.
Machinery orders rose more than the 0.8% decline forecast by analysts in July and better than the 0.9% increase in June.
The jump in machinery orders may make the Bank of Japan (BOJ) more optimistic that private sector investment will help stimulate the domestic economy.
Broken down by sector, it was found that orders for machinery from manufacturing companies fell by 5.4% compared with the previous month. Orders from service companies increased by 15.1%, which was due to higher orders from shipping and postal companies.