Bookings, an indicator of future capital spending, rose 14.8 percent in November from a month earlier, the Cabinet Office said in Tokyo today. The median estimate of 29 economists surveyed by Bloomberg News was for a 5.1 percent increase.

Weak overseas demand and gains in the yen have cut profits at Japanese exporters from Nippon Steel Corp. to Panasonic Corp. The rebound in orders signals that the world’s third-largest economy is showing some resilience to the stronger currency and a slowing global economy.

“Even if growth slows in Europe, the world economy is not going to fall apart,” said Naoki Murakami, chief economist at Monex Inc. in Tokyo, before the report. “If America stabilizes and Europe begins to pick up, I’m optimistic about the long run.”

The yen reached a postwar record of 75.35 per dollar on Oct. 31 and an 11-year high of 97.28 per euro on Jan. 9, making Japanese products more expensive overseas.

“The biggest hurdle for Japanese companies will be the lack of demand, no matter where the yen goes,” Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance Co. in Tokyo, said before the report. “However, a moderate recovery has already started.”

A stalled economy could increase opposition to Prime Minister Yoshihiko Noda’s plan to double the nation’s sales tax by 2015. The opposition party and some members of the ruling party have said a tax hike could further cripple a rebound.

Intervention

Authorities intervened in the currency market at least three times to weaken the yen last year, and the government compiled four extra budgets, worth about 20 trillion yen, measures that have not been enough to sustain an export-driven recovery.

The country’s economy may have contracted in the fourth quarter of 2011, according to calculations by the Japan Center for Economic Research, an independent analysis group in Tokyo. Gross-domestic product contracted for two quarters before growing an annualized 5.6 percent in the three months through September. The Cabinet Office will release fourth-quarter GDP data next month.

Nippon Steel Corp., Japan’s largest steel manufacturer, reported on Oct. 26 that its profits declined by more than half in the third quarter of 2011 on slow demand in Asia. Panasonic Corp., Japan’s largest home-appliance manufacturer, has revised its forecast for the year through March 2012 to a loss of 420 billion yen, its largest in 10 years, due to appreciation of the yen and company restructuring.

To contact the reporter on this story: Eleanor Warnock in Tokyo at ewarnock@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

http://www.bloomberg.com/news/2012-01-16/japan-s-machinery-orders-jump-14-8-in-sign-of-corporate-spending-rebound.html

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