Japan core machinery orders see surprise 3.6% fall in May

A worker stands in the shell of a building at a construction site in Tokyo.
A worker stands in the shell of a building at a construction site in Tokyo. PHOTO: REUTERS

TOKYO (REUTERS) - Japan's core machinery orders fell 3.6 per cent in May from the previous month, government data showed on Monday (July 10), in a sign that capital spending lacks momentum.

The surprise fall in the core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, undershot the 1.7 per cent increase expected by economists in a Reuters poll. It followed a 3.1 per cent drop in April, Cabinet Office data showed.

Compared with a year earlier, core orders, which exclude ships and orders from electric power utilities, grew 0.6 per cent in May, versus the 7.7 per cent growth expected by economists and the 2.7 per cent rise in April.