Japan Real Time Charts and Data

Edward Hugh is only able to update this blog from time to time, but he does run a lively Twitter account with plenty of Japan related comment. He also maintains a collection of constantly updated Japan data charts with short updates on a Storify dedicated page Is Japan Once More Back in Deflation?

Monday, December 10, 2007

Japan Machinery Orders October 2007

Japan's October machinery orders rose at a rapid 18.7% year on year clip, signaling that companies have been increasing spending plans to meet Asian and European demand for chips, cars and electronics. Private sector orders climbed 12.7 percent to 1.08 trillion yen ($9.7 billion) from September, when they fell 7.6 percent, the Cabinet Office said in Tokyo today. But the biggest push came from government orders (up 21.6%) and overseas demand (up 16%). As can be seen in the chart below (click-over for better viewing), overseas demand has been much stronger than total domestic in recent months.

Orders for manufacturing equipment climbed 10.2 percent, the Cabinet Office said. Service companies increased orders 8.8 percent. Machinery orders indicate business investment in the next three to six months.

Exports to China and Europe, we should remember, surged to a record in October prompting companies to spend more on factories and equipment. And just to remind us of this I am again reproducing the key chart, which indicates just how the composition of Japanese exports is changing, with Europe and China more than making up for an absolute and relative decline in the importance of exports to the US (on all of which see this post here).

Sales overseas, we should remember, were responsible for almost all of Japan's economic growth in the third quarter. But we should also remember that the Economies of Japan's European customers are now slowing, while China is entering a "battle of the titans" type confrontation with an inflation process which is increasingly getting out of control, with an uncertain prognosis over the immediate and mid-term future.