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JAPAN DATA: Weaker Core Machine Orders Implies Downside Capital Spending Risks

JAPAN DATA
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Japan's September core machine orders were below market expectations. They printed at -0.7% m/m, against a market expectation of a +1.5% rise. The prior month was a -1.9% dip. We fell through all the months of Q3. 

  • In y/y terms, core machine orders were down to -4.8%. This is well off the Q2 highs, but still above earlier 2024 lows sub -10%y/y.
  • The chart below overlays the core machine order in y/y terms against capital spending (ex software) for Japan.
  • The softening momentum in core machine orders through Q3 points to some downside risks to capital spending for Q3, although there has been some disconnect between the two series in recent years.
  • Note the Q3 capital spending data is due on Dec 2. 

Fig 1: Japan Core Machine Orders (White Line) & Capital Spending Y/Y 

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Japan's September core machine orders were below market expectations. They printed at -0.7% m/m, against a market expectation of a +1.5% rise. The prior month was a -1.9% dip. We fell through all the months of Q3. 

  • In y/y terms, core machine orders were down to -4.8%. This is well off the Q2 highs, but still above earlier 2024 lows sub -10%y/y.
  • The chart below overlays the core machine order in y/y terms against capital spending (ex software) for Japan.
  • The softening momentum in core machine orders through Q3 points to some downside risks to capital spending for Q3, although there has been some disconnect between the two series in recent years.
  • Note the Q3 capital spending data is due on Dec 2. 

Fig 1: Japan Core Machine Orders (White Line) & Capital Spending Y/Y 

Keep reading...Show less