A worker assembles a Toyota Motor Corp. Corolla Axio sedan on the production line of the Central Motor Corp. plant in Ohira village, Miyagi Prefecture, Japan. (Bloomberg)
Japan’s machinery orders fell less than economists forecast in March, as earthquake reconstruction helped to support the nation’s growth.
Bookings decreased 2.8 percent from the previous month, when they rose by the same amount, a Cabinet Office report showed in Tokyo Wedensday. The median estimate of 29 economists surveyed by Bloomberg News was for a 3.5 percent decline. Orders can swing between gains and declines depending on the timing of major projects.
Japan’s government may report Thursday that the world’s third-biggest economy returned to growth in the first quarter after shrinking in the final three months of last year, a Bloomberg News survey of analysts shows. Europe’s sovereign-debt crisis and gains by the yen against the dollar may limit the full-year expansion by capping exports.
“The recovery in business investment is good news, but it’s unlikely to be strong enough to help accelerate growth,” said Hidenobu Tokuda, an economist at Mizuho Research Institute Ltd. in Tokyo. “Companies are reluctant to increase spending because of the strong yen.”
The yen traded at 80.35 per dollar at 9:44 a.m. in Tokyo. That compares with a post-World War II high of 75.35 in October and this year’s low of 84.18 on March 15. Finance Minister Jun Azumi says that he’s watching for speculative moves in the currency and is ready to take immediate action as needed.
The government forecast orders will climb 2.5 percent this quarter after increasing 0.9 percent in the first three months of 2012, Wednesday’s report showed.
Japanese equities dropped as public and political opposition to austerity measures in Greece add to the risk that the nation will exit the euro, disrupting markets and the global economy. The Nikkei 225 Stock Average fell 0.4 percent. Nippon Sheet Glass Co., which gets 39 percent of its sales in Europe, slumped to its lowest level on record Tuesday.
Post-election attempts to form a ruling coalition in Athens broke down Tuesday after nine days, sending Greeks back to the polls next month with surveys giving the lead to an anti-bailout party that would tear up the conditions attached to aid for the debt-stricken nation.
In Japan, gross domestic product rose an annualized 3.5 percent in the first quarter, compared with a 0.7 percent contraction in the final three months of 2011, according to the median estimate of 27 economists surveyed by Bloomberg News. The economy got a boost from earthquake rebuilding and incentives for the purchase of energy-efficient cars.
The Cabinet Office will release the number at 8:50 a.m. in Tokyo Thursday.
As the boost from reconstruction wanes, the pace of the expansion may slow. Growth may be 2.2 percent in the second and third quarters, and 1.7 percent in the final three months of the year, according to the average forecast of 40 economists in a survey by Japan Center for Economic Research released Tuesday.
(Bloomberg)