— Correcting forecast by UBS Securities
— Correcting median forecast to +5.0% m/m from +4.6%.

— See Separate Table For Details Of Individual Forecasts

TOKYO (MNI) – Japan’s core private-sector machinery orders appear
to have posted the first month-on-month gain in two months in August, up
by a seasonally adjusted 5.0% (correcting from 4.6%) after falling 8.2%
in July, according to the median forecast of economists surveyed by
Market News International.

The Cabinet Office will release August machinery orders data at
0850 JST on Wednesday, Oct. 12 (2350 GMT on Tuesday).

Core private-sector machinery orders, which exclude volatile demand
from electric utilities and for ships, are viewed as a leading indicator
of corporate capital investment.

“Machinery orders are expected to have risen (in August) led by
orders from the auto industry,” said Yoshimasa Maruyama, chief economist
at Itochu Economic Research Institute.

Meanwhile, Takumi Tsunoda, senior economist at Shinkin Central
Bank, said, “The recovery of machinery orders has not gained traction as
firms remain cautious about their capital spending amid the strong yen
and the uncertain global economic outlook.”

Some data released recently suggest a rebound in August machinery
orders.

Orders of machine tools in the domestic market rose 31.3% on year
in August, accelerating from +22.2% in July, an industry organization
has said.

Core machinery orders are forecast to rise 0.9% in the
July-September quarter, increasing for a third straight quarter after
+2.5% in April-June, the Cabinet Office said last month.

In order to hit the Q3 forecast, core orders will have to rise 3.6%
m/m in both August and September.

Looking ahead, Yoshiki Shinke, senior economist at Dai-Ichi Life
Research Institute, said, “We can expect a gradual rise in capital
investment, due mainly to investment aimed at recovery from (the March)
earthquake.”

According to the Bank of Japan’s quarterly Tankan survey for
September released on Oct. 3, major firms’ capital investment is
expected to rise 3.0% y/y in fiscal 2011.

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

[TOPICS: M$J$$$,M$A$$$,MAJDS$]