Japan machinery orders up 8.8 percent in July

[September 08, 2010]  TOKYO (AP) -- Japan's machinery orders, a key gauge of future business investment, rose the most in seven months, a sign that companies are more confident in the economic recovery.

The 8.8 percent jump in July from June was the second straight month of increase as solid overseas demand bolstered corporate sentiment, according to government figures released Wednesday.

The figure surpassed Kyodo news agency's average market forecast for a 1.5 percent month-on-month rise and is the biggest jump since December. Orders rose 1.6 percent in June after tumbling 9.1 percent in May.

The figures indicate progress in the country's economic recovery, said Keisuke Tsumura, the Cabinet's parliamentary secretary.

But "if the impact of the yen's rise becomes more serious, we cannot rule out the possibility that machinery orders and capital spending will be negatively affected," he said, according to Kyodo.

Core private sector machinery orders received by 280 manufacturers totaled 766.3 billion yen ($9.1 billion) for July, the Cabinet Office said in a monthly report. Core orders do not include figures considered volatile, such as those for ships and electric utilities.

The data showed orders from manufacturers climbed 10.1 percent, with substantial gains in the chemical and electronics equipment sectors. Non-manufacturers' orders rose 8.1 percent.

In the three month period to September, the Cabinet Office predicts orders will rise 0.8 percent.

[Associated Press]

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