TOKYO: Japan's core machinery orders unexpectedly rose in August, extending gains and highlighting resilience in capital spending even as the economy remains under pressure from the coronavirus pandemic. The modest increase in core orders was a welcome sign of strength for the economy however, companies are still struggling from the hit to their corporate earnings.
Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 0.2% in August after a 6.3% rise in July. The rise, which was due to strong orders for general production machinery as well as petroleum and coal products, was better than a 1.0% contraction seen by economists in a Reuters poll. By sector, orders from manufacturers shed 0.6%, while those from non-manufacturers lost 6.9%, the Cabinet Office data showed on Monday.
Orders for cars and car parts rose for the third straight month in August, while those for chemicals and chemical products provided a big drag. Overseas orders, which are not included in core orders, rose their fastest since April 2014, jumping 49.6% from the previous month after posting a 13.8% gain in July.
Separate data on Monday showed lending by regional banks stayed high in September as smaller firms scrambled to meet their immediate funding needs.
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