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--Japan Mar Core Machine Orders -3.9% M/M; MNI Median -2.0%
--Japan Q2 Core Machine Orders Seen +7.1% Q/Q, 4th Straight Rise
--Japan Q1 Core Orders +3.3% Q/Q Vs Official Forecast -1.5%
--Govt Keeps View: Machine Orders Show Signs of Pickup
TOKYO (MNI) - A limited decline in Japanese machinery orders in March led
to the third straight quarterly gain in January-March, indicating business
investment in equipment remains solid, data from the Cabinet Office released
"The drop in core orders in March was in payback for gains in the previous
two months and was not so large. The three-month moving average in March showed
the third rise in a row, supporting our view that machinery orders are showing
signs of a pickup," a Cabinet Office official told MNI.
"Core orders are expected to post a fourth consecutive quarterly rise in
April-June, reflecting strong demand for industrial and electronic machinery to
cope with labor shortages amid the modest economic recovery."
The key points from the latest machinery orders data:
* Core private-sector machinery orders, which exclude volatile orders for
power generation equipment and ships, fell 3.9% on month in March after rising
2.1% in February, posting the first m/m drop in three months. But the
three-month moving average marked the third straight monthly gain, up 2.0% from
the previous three-month period.
* The decrease was bigger than the MNI survey median forecast for a 2.0%
fall (forecast range: from -6.0% to +0.2%) but it was in reaction to solid gains
of 8.2% in January and 2.1% in February. Five one-off large orders in March
helped limit the decline.
* Orders from the manufacturing sector fell 17.5% in March for the first
drop in three months after +8.0% in February while those from the
non-manufacturing sector rose 2.2% on month after being unchanged in February.
* The Cabinet Office maintained its assessment that "machinery orders are
showing signs of a pickup."
* Core machinery orders are projected by the Cabinet Office to rise 7.1% on
quarter in April-June for a fourth straight quarterly rise following +3.3% in
January-March, which was stronger than the official forecast for a 1.5% drop in
Q1. It would be the longest stretch of increases in Q2 since the one-year period
of gains from Q3 of 2014 until Q2 of 2015.
* The Cabinet Office's survey showed that Q2 orders will be led by demand
for industrial and electronic machines (including robots, computers and
chip-making equipment) from the manufacturing sector and demand for a category
of engines, boilers and turbines as well as train cars from the
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