business

Japan machinery orders surge on weak yen

22 Comments
By Kaori Kaneko

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Japan’s core machinery orders surged unexpectedly in December, up for a third straight month

Thank you Mr. Noda.

2 ( +5 / -3 )

Well, Japan's quality is right there on top - # 1 - and if the price is right, the smart foreign manufacturer will buy from Japan. ....................................................So the deflated Yen is a good kick start for this sluggish economy.

3 ( +7 / -4 )

As a matter of fact one of the biggest customers of machinery has become Saudi Arabia and some of the other big emerging markets like Mongolia .

3 ( +4 / -1 )

YubaruFEB. 07, 2013 - 10:20AM JST Japan’s core machinery orders surged unexpectedly in December, up for a third straight month

Thank you Mr. Noda."

No, thank you Yen Sama. More jobs for workers at those establishments.

0 ( +3 / -3 )

Hopefully this is just the beginning of a long and prosperous run for the Japanese economy!

8 ( +8 / -0 )

Thank the bank of Japan. Pm's have little to do with this. They can only give suggestions to the BOJ.

2 ( +2 / -0 )

semperfi: "So the deflated Yen is a good kick start for this sluggish economy."

It is, in the short run, at least. The problem with the current MASSIVE injection of public funds and the intentional (despite claiming the contrary) deflation of the yen is that Japan Inc. wants to return to the boom days of the '80s without taking into account that that was the very model that led to the inevitable collapse (ie. the export-driven economy). One reason is that with the depreciation of the yen, IMPORTS became a lot more expensive, and your average Joe Tanaka will lose more and spend less, which will lead to further stagnation.

This is good, in the short run, but they have to find a way to keep it going successfully and without making the middle-class and poor people poorer while making the rich richer.

-3 ( +2 / -5 )

" So the deflated Yen is a good kick start for this sluggish economy."

The BOJ injections INflate the currency supply and thereby deVALUE the yen which makes Japanese goods more competitive on the global markets. The other central banks have been injecting currency to devalue their currency faster, so Japan is just playing catch-up.

1 ( +2 / -1 )

Spend like there is no Obama!... whoop's" Tommorro"...LOL...AR-15 or a Stronger Yen? HMMM??? Japan should manufacture AR-15 rifles and sell them to the good ole USA, and Yen in on all those Obama Congress side stepping Speaches...before the Obama assault rifle ban, and Obamacare...I would buy a superior "Made in Japan" AR-15 rifle just in defiance to Obama...and his little to help no one with no job's idea's...in fact I'll take two....

0 ( +1 / -1 )

Yeah, the BOJ can be thanked for this, not Abe! And, there is one major flaw with returning Japan to the bubble economy days. Japan no longer has the workforce to support it. The workforce has decreased by nearly 20% and the retirees have increased by the same amount. There will be no more bubble in Japan. The will only be an inflated economy, higher taxes, insurance and pension installments and a drop in salaries to go with it. Doom and gloom!

-3 ( +1 / -4 )

October to December. Hmm. PM Noda was is power and the Yen was still high. How does this data support PM Abe?

1 ( +1 / -0 )

OnniyamaFeb. 07, 2013 - 01:09PM JST

October to December. Hmm. PM Noda was is power and the Yen was still high. How does this data support PM Abe?

Thanks for stating the obvious. Sadly, going by some of the posts on this thread, it was needed.

0 ( +2 / -2 )

the surge in the yen will also cause a surge in inflation, especially since japan is forced to import more gas and oil due to the shutdown of nuclear power plants. in the short and long-run, it's the middle and lower class that will bear the brunt of these higher costs.

2 ( +2 / -0 )

Smith: deflation of the yen is that Japan Inc. wants to return to the boom days of the '80s without taking into account >that that was the very model that led to the inevitable collapse

The model that caused the collapse in Japan is similar to the recent Lehman crisis: poorly capitalized banks, loans on overvalued property, continued resale of said overvalued property to make gains, and an unwillingness to write-off bad debt or stop giving loans on overvalued property. That situation resulted in ever increasing purchase prices that ultimately were unsustainable.

A strong yen does make foreign goods more expensive for importers while benefiting domestic exporters, but really, how much will "Joe Tanaka" care if he can't buy some American products? The domestic stuff will still cost more anyway.

All in all, I see the exchange rate changes as fundamentally good for Japan. Sure, inflation will result in the older population getting shorted since their J Bonds and pensions will have less value. That is the only real issue as far as I can see. A small amount of inflation is better than deflation. The national debt will be less in real money in the future because tax revenue will be more in real terms to pay that old debt.

2 ( +2 / -0 )

the yen’s recent weakening and rising share prices are expected to boost corporate profits and thus encourage capital spending.”

People, please take note, this will do very little for the Japanese economy, except increase the structural faults within the economy of manufacturing overproduction and declining domestic consumption.

Seriously some of you should get a grip if you really believe that the US, China and Europe are going to allow the Japanese to steal jobs from their home workforce because it is over producing what it cannot sell within Japan. All the Japanese have done, by weakening the Yen, is fire the first salvo in a currency war it cannot win.

If Abe was really concerned about injecting inflation into the Japanese economy and not just looking after the interests of Japan Inc, he would legislate for statutory yearly pay rises of 5% for all japanese workers for the next 4 years.

Abenomics is a fraud being operated by a dunce.

-1 ( +2 / -3 )

semperfiFEB. 07, 2013 - 10:22AM JST Well, Japan's quality is right there on top - # 1 - and if the price is right, the smart foreign manufacturer will buy from Japan. ....................................................So the deflated Yen is a good kick start for this sluggish economy

1? It's no longer possible to make sweeping generalisations about Japanese product quality. The dramatic fall in Japanese electronics quality is a case in point.
-2 ( +0 / -2 )

viking68Feb. 07, 2013 - 01:24PM JST

A strong yen does make foreign goods more expensive for importers while benefiting domestic exporters, but really, how much will "Joe Tanaka" care if he can't buy some American products? The domestic stuff will still cost more anyway.

Did you really mean to write this? Can you not see the illogic?

A strong Yen makes foreign goods cheaper for importers and should make them cheaper for consumers. Unfortunately the highly regulated distribution network of Japan has meant that the profit has been going to the middleman and the Japananese consumer has seen very little benefit of a strong Yen.

We are not talking about American products such as denims or peanut butter being more expensive, we are talking about day to day essentials being more expensive, things that a Japanese cannot do without. Fuel, which is a 100% imported, food, which 50% is imported and raw materials, such as iron ore, which is 100% imported.

As SmithininJapan states, the Japanese consumer will have less buying power for the non-essential products which Japan manufactures because the essentials will have become that much more expensive. Take McDonalds as an example. They have just seen the price of their imported beef go up 20% from last month. If you really think that they are going to pass that expense onto their customer, rather than cut the wages of their employers, then you know less about Japan than some people who post on here.

Sure there will be price inflation, but it will be accompanied by wage deflation. All this is a recipe for a fall in domestic consumption and as I said previously the rest of the world is not going to allow Japan to begger her neighbours. There is a huge difference in US QE from Japanese QE. US QE is there to stimulate domestic consumption, a weaker dollar is a secondary result. Japanese QE has always been about weakening the Yen and actually has always led to a fall in domestic consumption.

1 ( +2 / -1 )

Those who say that the middle class will suffer from weak yen via increasing prices should understand that it is better to be little bit poorer than it is to be unemployed and penniless.

-1 ( +1 / -2 )

We need to be careful, the Americans will come at us and say we're currency manipulators. You know how these congress and senators are like in US, they jump at any opportunity to beat up others.

0 ( +1 / -1 )

@tiger let them say what ever they want, the US is the biggest currency manipulators there is, the amount of money printing the US that the has carried out over the last 4-5year is over $800billion and this is a conservative figure. cant wait until they say something, be the most hypocritical statement this decade!! LOL

1 ( +1 / -0 )

wtfjapanFeb. 07, 2013 - 10:38PM JST

@tiger let them say what ever they want, the US is the biggest currency manipulators there is, the amount of money printing the US that the has carried out over the last 4-5year is over $800billion and this is a conservative figure. cant wait until they say something, be the most hypocritical statement this decade!! LOL

There is a huge difference in US QE from Japanese QE.

US QE is there to stimulate domestic consumption, a weaker dollar is a secondary result.

Japanese QE has always been about weakening the Yen and has always led to a fall in domestic consumption.

-1 ( +0 / -1 )

I find this a good news .

1 ( +1 / -0 )

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