Recent Updates
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- Japan: Tokyo CPI (Apr), Pulp and Paper Production, Labor Force Survey (Mar), Wholesale & Retail Trade, Industrial Production (Mar-Prelim)
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- more updates...
Economy in Brief
Kansas City Federal Reserve Factory Index Hits Record High
The Kansas City Fed reported that its index of regional manufacturing sector business activity surged to a record 26...
U.S. Initial Unemployment Insurance Claims Decline Sharply
Initial claims for unemployment insurance fell sharply to 209,000 (-17.1% y/y)...
German Confidence Flattens and Falters
German confidence for May is mooted at a 97.8% queue percentile standing...
U.S. Mortgage Loan Applications Are Little Changed; Rates Remain High
The MBA total Mortgage Applications Volume Index eased 0.2% last week (-1.9% y/y)...
Japan Shows Very Moderate Growth As Trade War Clouds Gather
Japan’s sector indexes showed a solid gain in February...
by Carol Stone June 17, 2005
Orders received by Japan's machinery industry rebounded sharply in April, according to data reported yesterday and today by the Japanese Cabinet Office. Total orders, seasonally adjusted, were up 14.8% in the month, after three successive declines. These order flows are very erratic, as seen in the chart, and we have plotted a 6-month moving average to show the trend. This measure increased 2.2% from March. April orders were 8.3% ahead of April 2004.
A broad division of these orders into domestic and foreign sources indicates that Japanese industry is still led by external demand. Foreign orders were up 31.3% in April and 18.3% over a year ago. These have a loose negative correlation with the value of the yen, as might be expected (see second graph). And while the yen has strengthened against the dollar (and therefore against the Chinese yuan), it has remained weak relative to the euro, at least until very recently. Taking account other currencies as well, a weighted "effective" exchange rate published by the Bank of Japan has been basically flat for the last three years, and therefore largely a neutral force on total foreign demand for Japanese products.
Domestic orders are creeping upward. Machinery orders from private non-manufacturing industries are also basically flat. However, manufacturing industry orders for machines are rising. This sector was up 14.4% in April alone, reaching ¥511 billion, the largest single month since May 1997. These orders are volatile, too, and such a jump and level are likely unsustainable in the near term. Even so, this sign of firmer domestic demand in Japan is encouraging.
Japan(Billion ¥) | Apr 2005 | Mar 2005 | Year Ago (Yr/Yr) | Monthly Averages|||
---|---|---|---|---|---|---|
2004 | 2003 | 2002 | ||||
Total Orders* | 2,421.6 | 2,109.5 | 2,243.7 | 2,202.7 | 2,113.1 | 1,836.7 |
% Change | 14.8 | -2.4 | 8.3 | 4.2 | 15.0 | -10.9 |
Domestic | 1,380.4 | 1,320.5 | 1,347.0 | 1,323.5 | 1,295.6 | 1,217.5 |
% Change | 4.5 | -4.7 | 2.6 | 2.2 | 6.4 | -14.8 |
Foreign | 915.0 | 696.9 | 781.4 | 770.4 | 708.4 | 521.5 |
% Change | 31.3 | 2.9 | 18.1 | 8.8 | 35.9 | -0.7 |