Japan’s core machinery orders, a key leading indicator of business investment in equipment and software, are expected to decline on the month in November for the first time in three months, reflecting a reactionary pullback following the unexpected sharp rebound in orders from the transportation and postal services sectors in the previous month.

Core machinery orders are forecast to fall 8.4 percent on the month in November, after unexpectedly jumping 7.0 percent in October. On a year-on-year basis, core orders, excluding those from electric utilities and for ships, are expected to rise for the 14th consecutive month by 1.0 percent, but sharply lower from a 12.5 percent increase in October.

Machine Orders are the total value of new private-sector purchase orders placed with manufacturers for machines excluding volatile items such as ships and utilities. It is a leading indicator of production. Analysts consider the data an indicator of capital spending. Rising purchase orders signal that manufacturers will increase activity as they work to fill the orders.

It is a leading indicator of production. Rising purchase orders signal that manufacturers will increase activity as they work to fill the orders. The importance of machinery orders cannot be overstated given the economy's dependence on exports. The purpose of these data is to get a picture of machinery manufacturers' order books and to collect basic material for analyzing the direction of the economy through an early understanding of trends in capital investment in machinery.