August machinery orders seen rising slightly, current account surplus
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[October 03, 2014] By
TOKYO (Reuters) - Japan's August core
machinery orders due next week are expected to rise modestly for a third
straight month, a Reuters poll found - doing little to ease fears that
the government's growth-promotion policies aren't working fast enough.
A sluggish recovery in exports and a slowdown in imports - as well
as a fillip from the weak yen - should probably help next week's
current account balance data maintain a small surplus, the poll
The machinery orders and current account data will follow a recent
run of weak economic figures, suggesting an expected rebound in the
economy after April's sales tax hike will be smaller than previously
Prime Minister Shinzo Abe is due to decide in coming months on
another tax increase next year, but weak data make that decision
Core machinery orders, a highly volatile data series regarded as a
leading indicator of capital spending in six to nine months, were
seen to have increased 0.9 percent in August from the previous
month, a Reuters survey of 24 economists found.
That figure falls well short of the 3.5 percent gain recorded in
July and the 8.8 percent increase in June. In May, after the sales
tax rise first hit, core orders showed a record monthly decline of
"The delay in export recovery and weak factory output will have an
adverse impact on firms' investment sentiment," an economist at
Shinkin Central Bank said in the survey. "Although some data show
corporations have solid capital spending plans for this fiscal year,
there is a chance they will postpone their plans depending on the
The poll also found core machinery orders were expected to show an
annual fall of 5.1 percent in August after a 1.1 percent gain in
The Cabinet Office will announce the data on Oct. 9 at 8:50 a.m.
(Oct. 8 at 2350 GMT).
A day before the machinery orders data is published, the finance
ministry will announce the current account balance for August, which
is forecast to show a surplus of 198 billion yen ($1.82 billion),
according to the poll. That compared with a 416.7 billion yen
surplus in July.
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"Exports remain stagnant. The trend of trade deficits is expected to
continue although the deficit is unlikely to widen further due to
the slow pickup in imports," said an economist at Dai-ichi Life
The economy shrank an annualized 7.1 percent in the second quarter,
the biggest contraction since the 2009 global financial crisis, as
the rise in sales tax to 8 percent from 5 percent in April hit
The Bank of Japan is widely expected to keep monetary settings
unchanged at its two-day policy meeting ending on Tuesday, but it is
likely to offer a bleaker view on industrial production, reflecting
a surprise plunge in August's factory output.
(1 US dollar = 108.8000 Japanese yen)
(Editing by Eric Meijer)
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