Author: Tetsushi Kajimoto

Japan Machinery Orders Fall Raises Concerns for BOJ Recent government data from Japan revealed that core machinery orders have declined unexpectedly for the second consecutive month in May. This has raised concerns about capital spending and the necessary sustained recovery for the Bank of Japan to consider raising interest rates. In May, the leading indicator of capital spending fell by 3.2% month-on-month, following a 2.9% decrease in April. This decline came as a surprise to analysts who had predicted a 0.8% increase in a Reuters poll. The drop in machinery orders may signal potential challenges for the BOJ’s plans to…

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Moody’s credit rating firm stated that it would not necessarily downgrade Japan’s credit rating if the government fails to meet its primary budget-balancing target next fiscal year. According to Christian de Guzman, the Japan sovereign analyst at Moody’s, the target should be viewed as a commitment to fiscal reform rather than a strict requirement. De Guzman acknowledged that he did not anticipate the government meeting the budget target for the fiscal year beginning April 2025, but he emphasized that a failure to do so would not result in an immediate negative rating action. However, he also warned that if Japan…

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Japan’s core machinery orders fell by 2.9% in April, marking the first decline in three months according to government data. Despite this setback, the Cabinet Office remains optimistic about the overall trajectory of capital spending in the country. This news comes on the heels of the Bank of Japan’s recent decision to reduce its bond purchases, a move that signals a shift in monetary policy. The central bank is expected to outline a more detailed plan for reducing its massive $5 trillion balance sheet in the upcoming month. While the decrease in core machinery orders may raise some concerns, it…

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