Suddenly Japan’s recovery looks more like a relapse…

The core machinery order trends are as clear as they are depressing. The year/year trend is barely positive, the more-timely 6-month trend is negative and the even timelier 3-month trend is worse still. The silver lining, of course, is that although all those statements are true, things are not spiraling out of control. All three named trends are showing reduced tendencies to decline. Still there is no strength here.

The table below underscores the degree and widespread nature of the weakness. It is in both domestic and foreign orders.

When separated into domestic and foreign components, we find that Japan’s machinery orders are weakening for both venues. Domestic orders have been close to zero for sometime. After some brief strength in 2005 an 2006, they went flat and now are sliding with double-digit declines in year/year rates of growth. Foreign demand, where spikes of strength have peppered past trends have turned smoother and are also sinking rapidly.

March orders are not a bright spot for Japan’s economy.