Japan's January machinery orders seen up, risks remain
By Kaori Kaneko
TOKYO (Reuters) - Machinery orders, Japan's leading indicator of capital spending, are expected to have risen modestly in January for a second straight month, a Reuters poll showed, but deepening concerns over economic prospects have cast doubt on a sustained recovery.
Exports were expected to fall for a fifth straight month in February as emerging economies such as China remained weak, while imports likely dropped for a 14 consecutive month on slack domestic demand and low oil prices holding down energy costs.
The poll of 19 economists found that core machinery orders, a volatile data series regarded as a useful leading indicator of capital spending in the coming six to nine months, were expected to rise 3.0 percent in January from December.
In December, machinery orders rose 4.2 percent after dropping 14.4 percent in November, the fastest month-on-month decline since May 2014.
Compared with a year earlier, core orders, which exclude ships and electrical gear, were seen to have declined 3.6 percent in January, the poll showed.
"There is a possibility that worries about the global and domestic economic outlook impacted corporate sentiment on capex, but some firms appear to have carried out their solid capex plan," Takeshi Minami, chief economist at Norinchukin Research Institute, said in a report.
"But, through January-March, the chance probably has risen that firms could revise down their capex plans and postpone them."
The cabinet office will release the data at 8:50 a.m. on Monday (2350 GMT, Sunday).
TRADE EXPECTED TO DECLINE
Exports were expected to have declined 3.1 percent in February from a year ago and imports to have dropped 15.2 percent, down for a 14th straight month, when the finance ministry releases trade data at 8:50 a.m. on Thursday (2350 GMT, Wednesday).
This was expected to produce a February trade surplus of 388.6 billion yen ($3.43 billion), taking trade back into surplus from a revised 648.8 billion yen deficit in January.
The Bank of Japan is set to hold off cutting interest rates at next week's rate review, sources told Reuters, as it works to soothe market jitters caused by January's surprise decision to adopt negative interest rates.
($1 = 113.4400 yen)
(Reporting by Kaori Kaneko; Editing by Eric Meijer)
