A Honda motorcycle assembly line. Japan's manufacturing sector operates under a different model than that followed in much of the West. Photo: Reuters / Naomi Tajitsu

Core machine orders in Japan fell 0.7% year-on-year in March, down from growth of 5.6% in February, and below forecasts of a 1.2% gain, reports the Financial Times.

The surprise drop has prompted speculation among analysts that Japan’s capital expenditure weakened for the first quarter of the year.

Marcel Thieliant of Capital Economics said of the data that “the details were rather discouraging. Orders in manufacturing edged up by 0.6% m/m, but this mostly due [to] a jump in the non-ferrous metals industry. Without this jump in orders, manufacturing orders would have fallen by 10% m/m. Orders in the non-ferrous metals sector were three times their average over the last twelve months so a renewed fall in April is all but inevitable. Meanwhile, “core” orders in non-manufacturing fell by 3.6% m/m.”

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