TOKYO (Reuters) – Japan’s machinery orders rebounded in July from a sharp fall in the previous month, a welcome relief for the coronavirus-stricken economy but the outlook for capital spending remained uncertain due to fragile global business conditions.
Corporate Japan is facing strains from steep declines in earnings, discouraging business investment as the economy grapples with its worst postwar slump.
Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, grew 6.3% in July after a 7.6% decline in June.
The rise was bigger than a 1.9% gain seen by economists in a Reuters poll.
“Corporate earnings are likely to remain in a sluggish state in the second half of the fiscal year,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
Orders from manufacturers advanced 5.0%, while those from non-manufacturers gained 3.4%, the Cabinet Office data showed