10 Jul 2014
Japan's disappointing Machinery orders shouldn't alter BoJ's assessment - BNP Paribas
FXStreet (Łódź) - Raymond Van Der Putten from BNP Paribas comments on Japan's Machine Tool Orders data, released on Wednesday, saying that they were very weak, with the total orders almost one third lower than in the previous month.
Key quotes
"The volatility of the series make these data difficult to interpret. One interpretation is that companies rushed out to take advantage of the tax incentives introduced in January before the end of the fiscal year in March."
"It is certainly too early to discard our scenario that capital spending will be one of the drivers behind economic growth. Indeed, other surveys signal that the economy is recovering rapidly from the
dip in Q2."
"Moreover, the diffusion indices for current conditions of the Economy Watchers Survey, published last Tuesday, have markedly improved in May-June. In addition, the indices regarding future conditions are all above the 50-mark."
"Today’s consumer confidence survey confirms this picture. In June, confidence strengthened for the second consecutive month."
"All in all, we do not expect that the disappointing machinery orders release will alter the Bank of Japan’s assessment. The Policy Board will meet early next week, and we expect that it will keep monetary policy unchanged."
Key quotes
"The volatility of the series make these data difficult to interpret. One interpretation is that companies rushed out to take advantage of the tax incentives introduced in January before the end of the fiscal year in March."
"It is certainly too early to discard our scenario that capital spending will be one of the drivers behind economic growth. Indeed, other surveys signal that the economy is recovering rapidly from the
dip in Q2."
"Moreover, the diffusion indices for current conditions of the Economy Watchers Survey, published last Tuesday, have markedly improved in May-June. In addition, the indices regarding future conditions are all above the 50-mark."
"Today’s consumer confidence survey confirms this picture. In June, confidence strengthened for the second consecutive month."
"All in all, we do not expect that the disappointing machinery orders release will alter the Bank of Japan’s assessment. The Policy Board will meet early next week, and we expect that it will keep monetary policy unchanged."