Japan Machinery Orders Slide 3.3%

Japan’s machinery orders fell more than expected in August, a sign that companies will cut back spending as global demand slows. Orders, an indicator of capital spending in three to six months, declined 3.3 percent after rising 4.6 percent in July, the Cabinet Office said today in Tokyo. The median of 26 estimates in a Bloomberg News survey was for a 2.3 percent drop.

Today’s data follow government reports last month showing declines in industrial output and exports, underscoring the risk of a contraction in gross domestic product. In an interview in Tokyo, Japanese Prime Minister Yoshihiko Noda yesterday called for talks to contain economic damage from a dispute with China over East China Sea islands.

“There’s a growing number of people who are pessimistic about the economic outlook,” Jun Kawakami, an economist at Mizuho Securities Co. in Tokyo, said before the report. “It’s really hard to see any signs that companies will increase capital spending.” Read more >>