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Economy in Brief

Japan Machinery Orders Disappoint
by Robert Brusca   January 13, 2011

Japan's machinery orders fell by 8.3% in November as core order slipped by 3% falling for the third month in a row. Domestic orders continued to be very erratic and are weaker at only half the growth for foreign orders over the past 12 months. Still domestic orders have improved from a Yr/Yr drop of 14.8% over the previous 12 months to a rise of 11.2% over the most recent 12 months. Foreign-based machine tool orders are up by 25% in the just completed 12-months.

Japan's economy is still in a disordered state. In the region China is slowing and fighting inflation; S. Korea has just hiked rates to contain overheating. Australia is suffering massive flooding. The region is under an assortment of stresses. Japan is most dependent on exporting to China and to the US. The US economy has not succeeded in switching into a high gear in its recovery; China, having grown strongly for a long period is trying to deal with its excesses.

Meanwhile Japan is left with weak growth in its two main export markets and has a load of debt hindering its ability to maneuver plus domestic political instability. It is still having a hard time getting its economy on track after more than a decade of woe. The orders numbers show us that there is some progress being made but they also demonstrate that it has not been strong enough to boost growth in core orders to consistency.

Japan Machinery Orders
  M/M % SAAR %
SA Nov-10 Oct-10 Sep-10 3Mo 6Mo 12Mo 12Mo Ago
Total -8.3% 6.6% -9.2% -38.0% 26.3% 16.8% -8.7%
Core Orders* -3.0% -1.4% -10.3% -46.0% 8.9% 11.9% -20.0%
Total Orders
Foreign Demand -17.8% 16.0% 6.9% 8.1% 6.4% 25.0% 1.6%
Domestic demand -5.8% 1.3% -20.4% -66.6% 25.0% 11.2% -14.8%
* Excl ships and electric power
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