| Business | October 17, 2008 10:51 AM EST |
| Machinery orders fall in Japan |
| By Luisana Suegart from Markets.com |
Machinery orders in Japan dropped for the third straight month, escalating fears that the global crisis will send the economy into a recession.
According to the Cabinet Office, private-sector machinery orders fell 14.5 percent in August from July; a 2.8 percent fall was the prediction. The sector had not seen such a sharp fall since July 2006, when orders dropped 15.9 percent.
With the Nikkei dropping more 25 percent since August, the exchange said that Toyota Motor Corporation is likely to report a 40-percent loss in profits for the fiscal year. In September, Toyota’s sales were down 32 percent in the United States.
Down more than 9 percent on Wednesday, the market saw its biggest losses in 20 years; however, the exchange in Tokyo slightly recovered on Thursday as it saw a gain of 1.3 percent. The increase is due in part to central banks in South Korea, Taiwan and Hong Kong slashing interest rates, a move made by central banks of other leading economies on Wednesday. Japan, which has a key rate of 0.5 percent, did not make any cuts.
On Thursday, Prime Minister Taro Aso called for an economic package to relieve fears brought on by the deteriorating financial situation.
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