Japanese machinery orders have fallen to the lowest level on record and thousands of firms have gone bankrupt, data showed yesterday, dampening hopes of a quick recovery in Asia’s biggest economy.
Companies are slashing their investment to try to survive a global economic downturn that has pushed Japan into its worst recession since World War II.
Core machinery orders showed a surprise fall of 3 percent in May from the previous month, to ¥668.2 billion (US$7.1 billion), the lowest level since comparable records began in 1987, the government said.
The orders, a closely watched gauge of planned business investment, have fallen for three straight months, dashing market hopes of a rebound in May.
The data threw cold water over the prospects for a swift Japanese economic recovery, said Naoki Murakami, chief economist at Monex Securities.
“It reminds us of the risk that the pace of economic recovery may be very slow due to cutbacks in domestic capital spending by non-manufacturing and other companies,” he said in a report.
Core orders, which exclude volatile demand from power firms and for ships, are expected to fall 5 percent in the three months to last month from the previous quarter, the government said.
“Capital investment is likely to stay weak for some time,” Credit Suisse economist Satoru Ogasawara warned.
Last month 1,422 firms went bankrupt in Japan with debts of ¥10 million or more, up 18.2 percent from May and the highest level for the month since June 2002, a survey released yesterday showed.
For the first half of this year, corporate failures totalled 8,169, the most for the January-June period in six years, according to the survey by Tokyo Shoko Research.
“The government has declared the economy hit bottom but company failures do not show it,” said Masashi Seki, an official at the research firm.
Before the current downturn began, Japan’s corporate sector had been a key driver of a recovery in the world’s second largest economy following the recessions of the 1990s.
But major Japanese companies plan to trim their investment in factories and equipment by 9.4 percent on average for the current fiscal year to March, the Bank of Japan’s “Tankan” survey showed last week.
Another report released yesterday showed Japan’s current account surplus shrinking a sharper-than-expected 34.3 percent in May from a year earlier to ¥1.30 trillion.
PROVOCATIVE: Chinese Deputy Ambassador to the UN Sun Lei accused Japan of sending military vessels to deliberately provoke tensions in the Taiwan Strait China denounced remarks by Japan and the EU about the South China Sea at a UN Security Council meeting on Monday, and accused Tokyo of provocative behavior in the Taiwan Strait and planning military expansion. Ayano Kunimitsu, a Japanese vice foreign minister, told the Council meeting on maritime security that Tokyo was seriously concerned about the situation in the East China and South China seas, and reiterated Japan’s opposition to any attempt to change the “status quo” by force, and obstruction of freedom of navigation and overflight. Stavros Lambrinidis, head of the EU delegation to the UN, also highlighted South China Sea
The final batch of 28 M1A2T Abrams tanks purchased from the US arrived at Taipei Port last night and were transported to the Armor Training Command in Hsinchu County’s Hukou Township (湖口), completing the military’s multi-year procurement of 108 of the tanks. Starting at 12:10am today, reporters observed more than a dozen civilian flatbed trailers departing from Taipei Port, each carrying an M1A2T tank covered with black waterproof tarps. Escorted by military vehicles, the convoy traveled via the West Coast Expressway to the Armor Training Command, with police implementing traffic control. The army operates about 1,000 tanks, including CM-11 Brave Tiger
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, said it expects its 2-nanometer (2nm) chip capacity to grow at a compound annual rate of 70 percent from this year to 2028. The projection comes as five fabs begin volume production of 2-nanometer chips this year — two in Hsinchu and three in Kaohsiung — TSMC senior vice president and deputy cochief operating officer Cliff Hou (侯永清) said at the company’s annual technology symposium in Silicon Valley, California, last week. Output in the first year of 2-nanometer production, which began in the fourth quarter of last year, is expected to
Taiwan’s drone exports surged past US$100 million in the first quarter, exceeding last year’s full-year total, with the Czech Republic emerging as the largest buyer, the Ministry of Economic Affairs said. Exports of complete drones reached US$115.85 million in the period, about 1.2 times the total recorded for all of last year, the ministry said in a report. Exports to the Czech Republic accounted for about US$100 million, far outpacing other markets. Poland, last year’s top destination, recorded about US$11.75 million in the first quarter. Taiwan’s drone exports have expanded rapidly in the past few years, with last year’s total
RSS