English | دری

Japan’s rising machinery orders boost the economy

in International Business

Japan’s rising machinery orders boost the economy

Japan’s core machinery orders, a key indicator of capital expenditure, rose more than forecast in April in a positive sign for the economy.

Orders rose 5.7% from a month earlier. Most analysts had projected a 1.5% growth.

The figures come amid fears that a slowing economy coupled with a strong yen might see manufacturers shift production overseas.

However, analysts said the data showed that firms were confident about growth.

“The machinery orders are an early indicator of how the economy is doing, giving us an hint of investment trends,” Martin Schulz of Fujitsu Research Institute in Tokyo told the BBC.

“Strong orders indicate that reconstruction demand is kicking in, which is a good sign as domestic economy is going to be key to overall growth this year.”

Bank action

The strength of the Japanese yen has been one of the biggest concerns among Japanese manufacturers.

A strong currency not only makes Japanese goods more expensive to foreign buyers but also hurts their earnings when they repatriate earnings back home.

The yen has been highly volatile in recent months, rising by more than 10% against the US dollar between April and October last year. It was trading at 75.75 yen against the US dollar in late October.

That led to the Japanese central bank intervening in the currency markets.

Though the currency has weakened since, it still remains at a level considered high by most Japanese manufacturers.

It was trading close to 79.67 yen against the US dollar in Asian trade on Wednesday.

The strong currency has led to concerns that Japanese firms may lose their competitiveness and be forced to shift their production overseas.

However, analysts said that strong action by the Japanese central bank to stem the yen’s rise in the past had helped to allay those fears.

“Japanese policymakers have been prepared to intervene in the market and that is providing another layer of comfort to the Japanese businesses,” said Mr Schulz of Fujitsu Research Institute.


Tags assigned to this article:
japan economyJapan machinery

Related Articles

More Reforms Needed for Spain- Spanish Prime Minister Mariano Rajoy

Spanish Prime Minister Mariano Rajoy said that Spain’s economy needs to undertake further reforms that would help it become more

Weak yen boosts Japan’s exports

The weakened yen against the US dollar and a revival in demand from European markets have boosted Japanese exports. According

The Number of the rich in Asia is higher than in North America

According to the latest poll by the Royal Bank of Canada, the number of affluent people in Asia surpasses that

No comments

Write a comment
No Comments Yet! You can be first to comment this post!

Write a Comment

Your e-mail address will not be published.
Required fields are marked*

Time limit is exhausted. Please reload the CAPTCHA.