Japan core machinery orders up 12.7 pct in October, better than forecast UPDATE

Japan core machinery orders up 12.7 pct in October, better than forecast UPDATE

	Published : Mon, 10 Dec 2007 01:59 By : Agencies Print this Story

TOKYO (Thomson Financial) - Japan's core private-sector machinery orders rose a seasonally adjusted 12.7 percent to 1.08 trillion yen in October from the previous month as companies placed more orders to keep up with growing demand, data from the Cabinet Office showed Monday.

The rise was the first time in three months and beat market expectations for an increase of 7.3 percent. The rebound followed a 7.6 percent fall in September and a 7.7 percent decline in August.

Core private-sector machinery orders, which exclude orders from electric utilities and for ships,

are based on new orders received by 280 Japanese machinery makers. They are regarded as a leading indicator of corporate capital spending.

Machinery orders rose 3.3 percent in October from the same period last year after declining by 7.0 percent in September.

Despite the rebound, the Cabinet Office is sticking to its assessment that the trend in machinery orders is flat.

'Given the fact that the value of core private-sector machinery orders had been moving in a certain range (around 1 trillion yen) since late 2006, we have decided to maintain our view,' said

an economist at the Cabinet Office.

In October, 11 out of 15 manufacturing sub-sectors reported increased orders from the previous month, while six out of eight non-manufacturing sub-sectors also placed more orders.

Orders placed by non-manufacturers increased 13.7 percent to 554.5 billion yen in October

from 487.8 billion yen in September, which was the lowest level since March 2002.

The financial and insurance service sector led the gains, with a 59.0 percent rise in new orders, followed by a 45.2 percent rise in orders from transportation services.

Meanwhile, orders placed by the manufacturing sector rose 10.2 percent, the second straight monthly gain.

Orders from the electric machinery sector rose 21.8 percent, led by new orders for

semiconductor processing equipment.

New orders from chemical producers were up by 70.3 percent, while orders from the pulp/paper sector increased by 59.3 percent.

Separately, orders placed by shipbuilders surged 117.1 percent.

Foreign orders rose 16.0 percent from September and expanded by 18.6 percent from a year earlier.

Public orders jumped 21.6 percent from the previous month and were up 9.3 percent from a year ago.

Total orders rose 18.7 percent to a record 2.815 trillion yen from the previous month and were

up 10.9 percent from a year earlier.

For the October-December quarter, core machinery orders are forecast to rise 3.1 percent,

which the Cabinet Office said can be attained even if orders fall 0.7 percent both in November and December.

(1 US dollar = 111.67 yen)

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