USDJPY Extends Losses After Japanese Machine Orders Crash

It has not been a good week for Japan's economic outlook as following last night's dismal GDP print, tonight shows Japanese Machine Orders collapsed 11.9% MoM in December - the biggest crash since Japan raised the sales tax in May 2014...

Against expectations of a modest 2.0% drop (after November's 5.7% rise, Machine Orders collapsed...

Foreign Orders cratered 13.2% led by manufacturers suffering a 13.3% MoM drop.

This drops Japanese Machine Orders back to practically unchanged since May 2013...

Now that's stagnation!

As Goldman writes, December machinery orders fall sharply, reverse to lower end of range.

Private sector core machinery orders (excluding orders for ships and from electric power companies, core orders hereafter), a leading indicator of capex, declined sharply by 11.9% mom in December, erasing the increase in Oct-Nov (+10.9% in aggregate). Core orders have generally trended within a ¥800-¥900 bn monthly band since the end of 2014, and the ¥899.2 bn orders in November was at the upper end of this range. However, December orders of ¥792.6 bn reversed to the lower end of the range. The Cabinet Office revised its basic assessment, saying while orders were showing signs of improvement, they declined sharply in December.

Oct-Dec orders declined 0.1% qoq (Jul-Sep: +4.7%).

By demand sector, December manufacturing orders declined sharply by 13.3% mom (November: -0.2%). For Oct-Dec, manufacturing orders rose 4.0% qoq, the third straight quarterly increase. Meanwhile, core non-manufacturing orders (excluding orders for ships and from electric power companies) declined 7.3% mom in December (November: +9.8%), and also turned down again in Oct-Dec by 2.0% (Jul-Sep: +1.6%).

According to a survey of the order outlook for Jan-Mar, also announced on February 15, core orders are expected to recover slightly by 0.6% qoq. The outlook calls for manufacturing orders to decline 5.7%, the first downward correction in four quarters, while core non-manufacturing orders are expected to rise sharply by 7.4%.

External demand also corrects sharply in December: External machinery orders, a leading indicator of capital goods exports, declined sharply by 13.2% mom in December (November: +4.9%). Oct-Dec external machinery orders inched up 0.1% qoq (Jul-Sep: +9.2%). The Jan-Mar outlook calls for -5.5% qoq, which would represent the first decline in a year.

The reaction is another leg lower in USDJPY...


Ranger4564 Wed, 02/14/2018 - 19:37 Permalink

I don't understand the comments against the Yen... this is USDJPY, not JPYUSD, so this means, Yen is getting stronger, which is good for Japan. Cheap currency only has limited benefits, and most of the time it has detrimental effects on the nations stature / purchasing power.
To me, this is saying the USD is declining.

SDShack Wait What Wed, 02/14/2018 - 20:48 Permalink

Yep, we have had Trade/Resource Wars going back to the 70's. The result is the crowning of the Petro$. This is now evolving into Full Blown Currency Wars. The USSA Security State will sacrifice anything and everything to maintain the Petro$ against all others. Japan was written off decades ago. The EU is floundering. Yuan/Ruble is next in the crosshairs, along with any non-approved crypto. Long term cashless crypto is the goal of the NWO, but only after any possible fiat threats to the Petro$ have been eliminated.

In reply to by Wait What

Ranger4564 Wait What Thu, 02/15/2018 - 08:21 Permalink

Thank you Wait What. I understand that, which is why I said there are limits to nations of the benefits of a lower value currency... what I was trying to say is, the Yen is undervalued due to decades of financial sabotage by the west and cabal... a strengthening Yen is good for Japan, especially since it's so low right now.

My view is in the broader context of currency rebalancing globally... all currencies are on the move to an equilibrium based on a more honest money regime... less printing, more asset backed. Anyway... I think the Yen is strengthening because the cabal is losing their power, and the USD will collapse until the US agrees to BRICS demands for a fair and equitable currency regime. Trump has hinted various times he's in favor of this, but as far as I can tell, he has not yet released a new currency policy. If the USD goes low enough, that could signal that the old USD is being killed off to usher in the new USD.

In reply to by Wait What

cpnscarlet Wed, 02/14/2018 - 19:48 Permalink

Just enjoyed a wonderful Valentine's Day with homemade lasagna, Purple Passion wine, stuffed mushrooms, and Sesame Spinach.  Then I come back to see these headlines and all I can think is




Have a Nice Day.

Stormtrooper Wed, 02/14/2018 - 21:39 Permalink

I for one have no clue how to value one worthless fiat currency against another (I do know how to value gold against other commodities) and I find it totally counter-intuitive that with the Japanese economy in collapse mode that the Yen should gain value against the US dollar (I know, the US is also in collapse mode but that is not the news of the moment).

Maybe someone can help me out here.

Let it Go Thu, 02/15/2018 - 06:28 Permalink

The myth promoted by the central banks that a major currency cannot fail is accepted as fact by many people however, the rapid demise of either the yen or the euro is all that will be needed to reveal the truth. When a major currency fails it will remind people everywhere that our system of fiat money is held together only by faith in the system and a prayer.

Japan's public debt, which stands at around 250% of its GDP is the highest in the industrialized world. In the future, Japan's debt can only be addressed by printing more money and debasing the yen. The article below explores how when Japan crumbles it will be felt across the world.

  http://The Yen And Its Failure To Fail.html