TOKYO: Japanese core machinery orders fell for the second straight month in May, according to data released Monday, showing a continued deceleration in business investment in the second quarter amid a slowdown in the global economy. Core orders–a leading indicator of business investment–fell 1.4% from the previous month. Economists surveyed by The Wall Street Journal and the Nikkei had expected a 2.9% increase.
The slide in orders in May follows the biggest drop in nearly two years in April. On a year-on-year basis, core orders also fell in May by 11.7%. The government revised down its assessment of the overall trend, saying that growth in machinery orders was at a standstill. Previously it said orders were showing signs of an uptick.
Business spending has slowed since the start of 2016 as concern has increased about Chinese growth and weaker commodity markets. Growth concerns intensified after the U.K. decided last month to leave the European Union, creating fresh uncertainty about the European economy. After rising for two straight years under Prime Minister Shinzo Abe’s pro-growth program Abenomics, business investment lost momentum in the first quarter. The government and the Bank of Japan argue that business spending remains on a gradual recovery trend.
