Machinery Orders In Japan Show Biggest Drop In Nearly 20 Years

Japan’s machinery orders posted their biggest drop in almost 20 years, according to a report from Japan’s Cabinet Office.

The total value of machinery orders received by 280 manufacturers operating in Japan decreased by 16.0 percent in July, based on data form the previous month on a seasonally adjusted basis. Private-sector machinery orders, excluding shipping and electric power, dropped by 16.7 percent, rising by 8.9 percent in the second quarter.

Manufacturing orders dropped 18.7 percent in July of 2006 after an increase of 25.6 percent in June. Orders from service companies dropped 10.1 percent and communications equipment showed a 26.7 percent drop.

In the third quarter, the total amount of machinery orders was forecasted to fall by 0.8 percent, and private-sector orders, excluding volatile ones, were forecasted to rise by 4.9 percent from the previous quarter, respectively.