TOKYO • Japan’s machine tool orders fell 29% in February from a year earlier, the biggest drop since October 2009, adding to signals that a global slowdown is hitting the world’s third-largest economy.
While the gauge is volatile, the latest drop is the fifth straight and marks an acceleration in the decline, according to data from the Japan Machine Tool Builders’ Association.
The result fits in with a picture of a sharp slowing of Japan’s economy in the first quarter (1Q) as China’s slowdown amid a trade war with the US and uncertainty in Europe softens overseas demand.
The release follows other recent data showing Japan’s factory output sinking the most by a year in January, and exports slipping for a second consecutive month.
Economists are flagging the risk of a economic contraction in 1Q, with some even suggesting the economy may already have entered a recession. An index of economic indicators released last week also pointed to the possibility of an official recession.
Bank of Japan board members are likely to discuss a possible downgrade of their assessments of production, exports and overseas economies when they meet to set policy later this week, according to people familiar with the matter.
No policy change is expected at the meeting. — Bloomberg