Feb machinery orders rise unexpectedly in Japan

If there will be stuffs of "Made in USA" or "Made in China" all around the world, the thing is simple: just compare the differences and find opportunities to trade with the rest of the world where very soon Americans and Chinese will find the policy how to get them to their country.

Orders from manufacturers rose 8.0 percent in February, following a 9.9 percent increase in the previous month.

That's quite impressive.

It’s good isn’t it, JeffLee.

Not clear whether the orders will be paid for with retained earnings, but if so, it is a good thing those proposals from some quarters to tax such retained earnings, haven’t seen the light of day.

"Not clear whether the orders will be paid for with retained earnings, but if so, it is a good thing" 

It does not matter whether it is paid with retained earnings or debt. It is a good sign because they are investing in capital equipment which creates demand. Given their amount of retained earnings that Japanese companies have, it makes sense to finance out of cash. However, depending on their capital budget, it may make sense to use debt.

It does not matter whether it is paid with retained earnings or debt

The two are not equivalent. An entity with its own cash may make different investment decisions than one that would have to borrow cash in order to do so.

Therefore, the rest of my comment (which was chopped off, substantially changing its meaning! )

"The two are not equivalent"

From an Macroeconomic point it does not matter. If the are financing out of debt, it means that they have the confidence in economy to pay back the loans. Given Japan's zero interest environment it may make sense to fiance out of debt. However, if the choose to finance out of retained earnings, it shows they are confident in the current economic conditions to invest in production capacity. Therefore, regardless how they finance their investments in production it is a good sign from an macroecon point of view.

Of course from a balance sheet point of view, it does make a difference. It depends on the firm's WACC and how the CFO's wants to use debt whether they finance out cash or debt.