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Japan's Core Machinery Orders Jump in April Despite Global Uncertainty

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Japan's Core Machinery Orders Jump in April Despite Global Uncertainty

Japan's core machinery orders rebounded sharply in April, signaling resilient business investment despite growing uncertainty over the global economic outlook.

Core machinery orders, which exclude volatile sectors such as ships and electric power, rose 8.7% month on month on a seasonally adjusted basis in April, according to data released by the Cabinet Office on Wednesday.

The increase far exceeded the consensus forecast of a 1.2% gain, as tracked by Investing.com, and followed a 9.4% decline in March.

On an annual basis, core machinery orders climbed 15.6% in April.

The rebound suggests companies continued to invest in equipment and production capacity despite concerns over higher energy costs and geopolitical tensions.

Manufacturing orders rose 5.1% to 513.5 billion yen, supported mainly by demand from the textile mill products and non-ferrous metals industries.

Non-manufacturing orders increased 6.7% to 570.1 billion yen, reflecting steady investment activity across the services sector.

The data offers a positive signal for Japan's capital spending outlook and comes shortly after the Bank of Japan raised interest rates to a 31-year high, saying the economy has continued to recover moderately despite uncertainty linked to the conflict in the Middle East.

The machinery orders data also comes as Japanese companies navigate an evolving trade environment with the United States.

Last year, President Donald Trump agreed to impose a 15% tariff on Japanese products and reduce duties on automobiles to the same level, while Japan pledged to increase investment in the U.S. economy.

More recently, Washington proposed additional tariffs on imports from several trading partners, but Japanese Trade Minister Ryosei Akazawa said he confirmed with U.S. Commerce Secretary Howard Lutnick that no tariffs beyond those agreed under last year's arrangement would be imposed on Japan.

Global oil supply conditions may also improve in the coming months, following the U.S. and Iran's interim agreement to reopen the Strait of Hormuz.

Trump said the vital shipping route is expected to reopen on June 19 once the agreement is formally signed, potentially easing energy supply concerns for import-dependent economies such as Japan.

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