TOKYO - Japan’s machinery orders slipped in July, albeit at a slower-than-expected pace, as slowing global demand and protracted trade tensions hit corporate investment in the world’s third-largest economy.
The drop was smaller than a 9.9% fall expected by economists in a Reuters poll and followed a sharp 13.9% rise in June, the biggest month-on-month gain since comparable data became available in 2005. “There are some signs of weakness among manufacturers,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.
Amid the risks to the outlook, speculation is growing that the Bank of Japan could ease policy at next week’s board meeting to prevent a possible spike in the yen and dampen the impact from weaker external demand. Consumer confidence deteriorated in the wake of the previous tax hike to 8% from 5% in April 2014. That, in turn, caused an economic slump.