10 June 2002, 09:00 OUTLOOK - Japan machinery orders data to show recovery in business cycle
TOKYO (AFX-ASIA) - Japanese machinery orders data this week will show a
continued recovery in the business cycle, economists said.
"The most important April data are coming out, which is machinery orders. We
believe that machinery investment, in particular IT, tends to shape the domestic
business cycle," said UBS Warburg chief economist Hiromichi Shirakawa.
"We anticipate manufacturing firms gradually increasing orders under
recovery of production, and the focus is on pace of expansion in April."
Nikko Salomon Smith Barney also forecast a rise in orders.
"Business investment demand likely remained stagnant, but rising machinery
production plans suggest that core private machinery orders ... likely rose by 5
pct month-on-month, mostly reversing April 6.2 pct drop," it said in a note.
Meanwhile, economists expect the Bank of Japan to leave interest rates
unchanged at its policy meeting on Tuesday and Wednesday.
"The recent weakness of stock markets and remaining fragility of domestic
demand in particular capex would likely make the central bank take a wait and
see stance," said Hiromichi at UBS.
The following lists the range of forecasts given by surveyed economists for
key economic indicators to be released this week (compared with previous period
data or previous estimate):
JAPAN MAY M2+CDS, Monday (8.50 am):
-- up 3.3-3.7 pct mth-on-mth (UP 3.6; consensus UP 3.6)
JAPAN MAY DOMESTIC WPI, Monday (8.50 am):
-- up 0.1-down 0.1 pct mth-on-mth (0.0; consensus up 0.1)
-- down 1.0-1.3 pct yr-on-yr (down 1.2; consensus down 1.1)
HSBC Securities wrote: "The domestic WPI is expected to have moved sideways
on the month, and to have fallen 1.2 pct year-on-year. As industrial production
and shipments have probably already bottomed, deflationary pressures should be
easing somewhat."
JAPAN APRIL PRIVATE-SECTOR MACHINERY ORDERS, Monday (2.00 pm):
-- up 8.4-down 1.0 pct mth-on-mth (down 6.2; consensus up 3.7)
-- down 17.8-24.9 pct yr-on-yr (down 22.0; consensus down 21.0)
HSBC Securities wrote: "Private machinery orders are likely to have risen on
the month, for the first time in two months. In year-on-year terms, order growth
probably hit the bottom last October, and is likely to see moderate improvement
in coming months."
JAPAN APRIL CURRENT ACCOUNT BALANCE, Friday (8.50 am):
-- 1.01-1.34 trln yen (891.3 bln; consensus 1.22 trln)
HSBC Securities wrote: "The current account has been showing signs of
improvement in the last few months, and is expected to show the seventh
year-on-year increase in a row, reflecting improving exports. Strength in the
income account is also expected to have made a significant contribution."
© 1999-2024 Forex EuroClub
All rights reserved