Japan slows on Eurozone crisis and strong currency

JAPAN’S machinery orders fell much faster than expected in October, suggesting firms are slashing capital spending as the Eurozone debt crisis and yen strength cast a pall over the economy’s tentative recovery.

Core machinery orders, an indicator of capital spending in the coming six to nine months, slumped 6.9 per cent in October from the previous month, data showed yesterday.

The fall compared with a median market forecast for a 0.5 per cent drop and follows an 8.2 per cent slump in September, leaving orders just 1.5 per cent above year-ago levels.

While Japan has pulled out of a recession triggered by the March earthquake, a slump in exports and business sentiment add to growing signs of malaise.

Meanwhile imports surged 21.3 per cent on last November as energy requirements have shot up following the loss of nuclear power after the earthquake.