Japanese Machine Orders Crash Most On Record As BoJ Member Admits “Can’t Solve Structural Problems”

Just two days ago we exposed the abject failure of Abenomics as even allowing for distortions from the natural disasters which hit Japan, the machinery orders data will only embolden the BOJ to stay the course.

September Japanese Core Machine Orders crashed 18.3% MoM (more than double the 9% drop expected and considerably worse than the impact of the tsunami). That is the greatest monthly collapse in orders ever and led to machine orders collapsing 7% YoY (when expectations were for a 7.7% rise YoY)…

Worse still, historically, core machine orders are an early indicator of future capital spending, and exclude volatile orders for ships and orders from electrical power companies’

It comes on the back of the negative print for real cash earnings and the slide in household spending earlier this week. And all this before the sales-tax hike planned for next year.

The utterly dismal data adds to signs that gross domestic product may have contracted slightly in the third quarter…

And just in case you’re holding your breath for some “terrible news is great news” reaction from The Bank of Japan’s inglorious bag of tricks – “Wasurete kudasai”…

As one member of BoJ sheepishly admitted tonight: “Monetary policy can’t solve structural problems.”

I bet the gravely indebted, aging population of Japan wishes he figured that out about 20 or 30 years ago!! Persistent easing is not going away… and if we were betting people, we’d suspect ‘helicopter money’ is coming, after another BoJ member proclaimed:
“closer policy coordination with the government seems needed.”

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