MNI BRIEF: Japan Nov Machine Orders Post 1st Drop in 2 Months

Bank of Japan officials will closely monitor the outlook for capital investment following weak machinery orders for November, which aren’t consistent with solid capex plans in the BOJ December Tankan survey.

Japan's core machinery orders, which exclude volatile orders for power generation equipment and ships, fell 8.3% m/m in November, for the first drop in two months following a 5.4% rise in October, data released by the Cabinet Office showed Wednesday.

The BOJ will unlikely change its view on capex immediately as machinery orders, a leading indicator of capex, fluctuates sharply month-on-month.

Bank officials will carefully examine whether businesses will maintain solid capital investment plans through the upcoming economic data, including the March Tankan survey due out April 3 before the April 27-28 policy-decision meeting.

The government slightly lowered its assessment, saying that machinery orders are marking time. The previous view was a recovery of machinery orders is marking time.