Posted on 10 Jun 2009
The April result was far worse than the average forecast among market analysts of a 0.6 percent rise in core machinery orders.
The value of orders was the lowest in 22 years, suggesting companies are wary of investing with
"Companies are very reluctant to spend as they have yet to see signs showing the economy has bottomed," said Tetsuya Igarashi, an official in the Cabinet Office, which released the data.
The value of Japan's core private sector machinery orders, which exclude volatile orders from electric power companies and shipbuilders, tumbled from March to 688.8 billion yen ($7.1 billion), the lowest since April 1987's 674.6 billion yen, the government said.
"In the face of sluggish exports and weak domestic demand, companies are cautious over new investments," said Hiroshi Watanabe, an economist at Daiwa Institute of Research.
"Uncertainty over the direction of the global economy continues to weigh on corporate sentiment. It is likely that core machinery orders will be flat in the latter part of the year," he said.
April's 5.4 percent fall was the steepest decline since November last year, when machinery orders dropped a revised 12.2 percent, the government said.
The orders also fell for the second consecutive month.
Machinery orders in the manufacturing sector dropped 9.4 percent month-on-month, while those among non-manufacturers fell 8.8 percent, it said.
Orders from the regular machinery sector, which includes products like boilers and construction machines, plunged 44.3 percent month-on-month, while those from the metals sector were down 23.5 percent.
But orders from the auto sector rose 10.5 percent and those from the electronics sector jumped 15.6 percent during the month, offering a glimmer of hope in those battered sectors.
The Cabinet Office said
