Posted on 17 Oct 2022
For August, Japan's core machinery orders from domestic users other than shipbuilders and power equipment makers declined by 5.8% on month in value to Yen 909.8 billion ($6.17 billion) after two consecutive months of rises, according to a new survey released by Japanese government's Cabinet Office on October 12.
The survey is conducted among Japan's 280 major machinery manufacturers, serving a key indicator for the country's corporate capital spending in the next six to nine months, Mysteel Global notes.
Among the total, orders from Japan's domestic non-manufacturers declined by 21.4% on month to Yen 406.7 billion, while those from manufactures up 10.2% on month to Yen 496.4 billion, the data showed.
A sales official from a machinery maker in Tokyo attributed the decline in orders by non-manufacturers to the high base in July. "The slowdown in orders by non-manufacturers might have to do with the recent inflation and may raise concerns among non-manufacturers for their further investment," he said.
"But overall orders from manufacturers have been increasing, so we basically understand Japan's investment is improving and the steel consumption by machinery sector will stay firm," he predicted.
The on-month decline in August didn't lead Japanese government to revise its assessment of machinery orders as "the sector has been showing signs of picking up," because the average orders in recent three months were mostly flat from previous three months, the government said.
But a steel trader in Tokyo warned that Japan's inflation might accelerate amid the recent rapid depreciation of Yen, and Japanese private companies might lose appetite in new investment.
"If overseas buyers book more orders of Japanese machinery over the Yen depreciation, it might shore up Japan's overall machinery orders, but those have slowed down and thus are very concerned to us," he added.
Japan's machinery orders by overseas buyers fell by 18.9% on month to Yen 1.22 trillion for August, or having declined for the fourth consecutive month, the data showed.
Meanwhile, Japanese Yen against the U.S. dollar weakened to hit a 32-year low of Yen 147 on Thursday, or having depreciated by about 30% on year, Mysteel Global noted.
Japan's carbon steel orders from domestic industrial machinery makers over January-July totaled 855,923 tonnes, down 7.2% on year, and those of special steel at 893,316 tonnes, down 6.6% on year, according to the latest data from Japan Iron & Steel Federation.
Source:Mysteel Global
