Japan has revised its second quarter GDP growth to an annual rate of one percent from 0.8 percent, but the more significant news for today was the fall in July machinery orders. From Bloomberg:
Japan's machinery orders fell the most in almost 20 years, dashing expectations that the central bank will raise interest rates before the end of the year.
Non-government orders excluding shipping and utilities dropped a seasonally adjusted 16.7 percent in July from a month earlier, the largest slide since October 1986, the Cabinet Office said today. Orders from semiconductor, steel and mobile-phone companies paced the drop...
The Nikkei Stock Average sank 1.8 percent, the biggest slide in a month, led by companies including Advantest Corp., a maker of chipmaking equipment. The median forecast of 30 economists surveyed by Bloomberg News was for orders to fall 5.4 percent.
Yields on Japan's benchmark 10-year bond declined 5 basis points to 1.665 percent at 4:54 p.m. in Tokyo.
Some remain hopeful that Japan's expansion remains intact.
"We have to monitor these trends carefully to see if a general retreat in demand is in the works," Takehiro Sato, an economist at Morgan Stanley Japan Securities Co., wrote in a report. "But we think the decline is mostly being driven by special factors."
Today's drop "is payback for strong orders in recent months," said Itsushi Tachi, director of business statistics at the Cabinet Office. "The trend is for growth."
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