Core machinery orders in Japan, which exclude those of ships and electrical equipment, rose 13.9 percent from a month earlier in June 2019, the biggest monthly gain since comparable data became available in 2005 and above market consensus of a 1.3 percent drop. There was a strong upturn in non-manufacturing orders (30.5 percent vs -9 percent in May), boosted by transportation & postal activities (91.4 percent vs -29.9 percent); real estate (97.3 percent vs -34.8 percent); and information services (19.2 percent vs -7.5 percent). In addition, manufacturing orders fell at much softer pace (-1.7 percent vs -7.4 percent), as the decline in orders softened for iron & steel (-2.1 percent vs -13.3 percent); while there was a rebound in demand for non-ferrous metals (126.5 percent vs -25.1 percent) and fabricated metal products (31 percent vs -25.8 percent). Year-on-year, core machinery orders grew unexpectedly by 12.5 percent, also beating market expectations of a 0.6 percent fall. Machinery Orders in Japan averaged 0.30 percent from 1987 until 2019, reaching an all time high of 25.50 percent in October of 1996 and a record low of -17 percent in September of 2018.
Machinery Orders in Japan is expected to be -1.40 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Machinery Orders in Japan to stand at 0.50 in 12 months time. In the long-term, the Japan Machinery Orders is projected to trend around 0.20 percent in 2020, according to our econometric models.