We had the machinery orders data from Japan earlier, with a bad miss on expectations on this admittedly volatile data set: August Machine Orders: -5.7% m/m (vs. expected +2.3%)
- Japan's machinery orders unexpectedly fell ... a worrying indication that capital expenditure is weaker than many policymakers expected
- Could increase the chances of new fiscal and monetary stimulus
- Decline suggests capital expenditure is not as strong as indicated in last week's Bank of Japan's tankan survey
- Could undermine Governor Haruhiko Kuroda's argument that consumer prices remain on track to accelerate
- Cabinet Office lowered its assessment of machinery orders
"Machinery orders suggest that capital expenditure plans in the tankan could be revised down," said Hidenobu Tokuda, senior economist at Mizuho Research Institute ... "Our house view is the BOJ will ease policy in January, but the chances have risen that the BOJ will move later this month. There will also be talk about a new fiscal stimulus package"