Trade Desk Thoughts - Japanese Core Machinery Orders

Japanese Core Machinery Orders Actual -3.9%, Expected -4.3%, Previous -2.6%

Release Explanation: This release measures the value of new machinery orders with manufacturers. Japan is a manufacturing and exporting giant and therefore these numbers impact the overall view of how that side of the economy is fairing. When manufacturers increase their spending on machinery it signals that the industry is in an expansionary phase.

Trade Desk Thoughts: Japanese machinery orders were down a seasonally adjusted 3.9 percent in July. This is slightly better than analyst’s initial estimates which were looking for a 4.0 percent decrease. Manufacturers are expecting to see a global slowdown into the next year. The Japanese government is expected to report that the economy shrank more than what was initially estimated last quarter.

Forex Technical Reaction: The Japanese yen has fallen 35 pips from its opening price and broken below the neutral LFB pivot point at 107.45.

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