Japanese Machine Orders ....

Machine orders in Japan unexpectedly declines amid concerns about the strength of recovery 

Machine orders in Japan unexpectedly declined in April, indicating that companies still concerned about the strength of recovery, and the Japanese companies won’t increase their capital spending after the March quake that has massive results on the economic recovery. 

The Japanese economy issued its machine orders reading for the month of April which dropped to -3.3%, compared with a previous incline 1.0% in March, while the market's expectations referred to 1.7%. 

Moreover, Japan's machine orders index annual reading also fell to -0.2% during the year ended April, compared with previous reading of 9.1% a year earlier, while the analysts' forecasts that referred to 4.9%. 

Capital spending is still falling as companies are concerned about the strength of recovery in Japan, while the world demand for Japanese products declined. More than third of factory capacity in Japan sitting idle, as exports still relatively weak, and large manufacturers are sitting plans to cut costs through firing workers and keeping production frozen at certain levels till global demand show more clear signs of recovery. 

Moreover, the largest companies in Japan are still suffering from a decrease for their sales, whereas Sales at companies from Ricoh Co. to Toyota Motor Corp. are falling after the disaster caused parts and power shortages and suspended the production cycle. 

On the other hand, Japan’s exports (which is the main engine for economic recovery) will face faltering phase because of there signs indicate that US economy is cooling, means Japan won’t depend on exports to propel growth and help it recover from the quake that has left more than 23,000 people dead or missing.

During the first day trading this week, the Japanese yen fell sharply versus its major currencies, especially against the US dollar after the report that showed the Japanese machine orders index has fell more than expected in April, pushed the yen to decline 

The USD/JPY pair inclined, recorded the highest level at 80.42 and the lowest level at 80.24.