Japan October core machinery orders rise first in 3 months, beating market expectations

Core machinery orders in Japan rose for the first time in three months during the period of October, beating what markets had initially anticipated. This, in turn, indicated a pickup in capital expenditure.

Japan’s core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, rose 4.1 percent in October from the previous month, data released by the country’s Cabinet Office showed Monday. The results handily beat the economists' median estimate of a 1.0 percent increase.

On a yearly basis, core machine orders tumbled 5.6 percent - shy of expectations for a fall of 4.9 percent following the 4.3 percent gain in the previous month. The total number of machinery orders, including those volatile ones for ships and from electric power companies, added 1.2 percent on month but tumbled 15.8 percent on year to JPY984.2 billion.

Manufacturing orders slid 1.4 percent on month and 9.0 percent on year to JPY331.0 billion in October, while non-manufacturing orders added 4.6 percent on month and slumped 3.9 percent on year to JPY533.6 billion.

Further, government orders surged 23.5 percent on month and 31.2 percent on year to JPY272.4 billion. Orders from overseas gained 1.9 percent on month and plunged 35.3 percent on year to JPY799.8 billion. Orders from agencies lost 8.4 percent on month and 0.7 percent on year to JPY111.1 billion.

Meanwhile, the USD/JPY traded at 115.66, up 0.25 percent, while at 6:00GMT, the FxWirePro's Hourly Yen Strength Index remained highly bearish at -137.40 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex