Japanese manufacturers cut capital investment

Japanese manufacturers cut capital investmentTokyo  - Japanese orders for machinery fell for the fourth straight month in January, the longest losing streak in at least 20 years, as the global recession strangled exports and profits.

The Cabinet Office said new orders for capital investment declined 3.2 percent from December, but less than most predictions.

The economy recorded its first current-account deficit in 13 years in January, meaning that many companies will have less cash for capital investment. Tokyo Electron Ltd., the world9s second-largest maker of semiconductor gear, forecasts a year without profits.

Exports fell 45.7 per cent year-on-year in January, leading to manufacturing production cuts. As the economy contracts, exporters will be hurt the worst, analysts said.

The four months of declining machinery orders was the longest negative streak since 1987, the earliest year for which figures are available.

Capital spending represents about 16 percent of gross domestic product, and along with exports drove a five-year expansion that ended in 2007. (dpa)

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