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Japan's Machine Tool Orders surprised on the upside - BNP Paribas

FXStreet (Łódź) - BNP Paribas economist Raymond Van der Putten comments on the Japan Machine Tool Orders data for August, which came in better than expected.

Key quotes

"Following a string of negative data surprises, machinery orders surprised on the upside. Core machinery orders, a leading indicator for capital spending, rose by 4.7% in August, whereas financial markets had expected a modest 1.5% increase."

"They are forecast to have grown by 2.9% in Q3, supported by good profits and easy financing conditions. Moreover, production capacity constraints have appeared."

"Total orders declined by 2.2% in August from the previous month. However, this was mainly due to the volatile component, i.e. orders for ships and those from electric power stations."

"Today’s release confirms our scenario for investment to become one of the main engines for growth in the coming quarters."

"Nevertheless, the economy has certainly shifted to a lower gear. We expect GDP growth to average at around 0.5% in 2015 compared with 1.5% in 2013 and 0.8% in 2014."

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