Machinery orders are a volatile measure almost by design. Because of the lumpy nature and large scope of some projects it is hard to get a reliable reading on this series. Looking at core orders is one way to stabilize the signal. This measure excludes the most volatile components of the order series. In October core orders fell, but that was after rising by a sharp 10.5% in December. The sequential growth rate of orders is on a strong upswing despite this month’s set back.

The overall orders measure that includes those large and lumpy projects also is improving strongly. For once the trends of the two series are in agreement even if the monthly numbers are going in different directions.

The chart also shows domestic Vs foreign machinery orders. While both series are showing some rise it is the foreign orders that are doing most of the improvement. Japan like Germany is benefitting more from demand outside of its country than from the domestic demand within.