TOKYO (Reuters) – Japan’s core machinery orders likely fell for a third straight month in January, in another sign the economy may be faltering on global trade friction, a Reuters poll showed on Friday.
The Bank of Japan is expected to hold its stimulus policy steady at its two-day policy next week, the poll found.
Core machinery orders, a volatile data series regarded as an indicator of capital spending in the coming six to nine months, were seen down 1.7 percent in January from the previous month after they slipped 0.1 percent in December, the poll of 14 economists showed.
From a year earlier, core machinery orders, which exclude those for ships and electric power utilities, probably declined 2.3 percent in January.
The data could raise concerns about the outlook for the export-reliant economy following drops in exports and factory output hurt by weak foreign demand and the China-U.S. trade war.
“Companies, especially exporters, have become slightly cautious about capital spending because external demand is weakening as the Chinese economy slows down,” said Yosuke Yasui, senior economist at Japan Research Institute.
The Bank of Japan’s quarterly business survey in December showed big firms’ capital spending plan for this fiscal year to March held firm. But analysts see that firms may think twice about their plans.
“We can not deny a possibility that companies may postpone their capital spending plans as uncertainty over the economy in Japan and overseas increases,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
The Cabinet Office will publish the machinery orders data at 8:50 a.m. on Wednesday, March 13 (2350 GMT, March 12).
The Bank of Japan is to maintain its short-term interest rate target at minus 0.1 percent and a pledge to guide 10-year government bond yields around zero percent, the poll showed.
The central bank will hold its policy meeting on March 14-15.
BOJ Governor Haruhiko Kuroda said this month the central bank would debate and communicate at an appropriate timing an exit plan from its ultra-loose monetary policy.
He also said the BOJ did not have a specific exit strategy now because it would take “significant time” in achieving its 2 percent inflation target. [nL3N20R171]
The poll found the BOJ’s corporate goods price index (CGPI), which measures the prices companies charge each other for goods and services, rose 0.7 percent in February from a year earlier, supported by oil related products and non-ferrous materials.
(Reporting by Kaori Kaneko; Editing by Robert Birsel)