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| The first Catholic prime minister of Japan, Taro Aso, met Tuesday, July 07, 2007, with Pope Benedict XVI for talks at the Vatican, that touched on topics including the world economic crisis and aid to Africa. Aso is in Italy for the G-8 summit of leaders of industrialised nations, which begins Wednesday.
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Japanese machinery orders unexpectedly dropped for a third month in May and the current account surplus contracted because of declining exports, renewing concerns about the fragility of the economy.
Orders fell 3 percent in May from April, the Cabinet Office said today in Tokyo and the Finance Ministry said the current account surplus shrank 34.3 percent from a year ago.
The machinery orders data were an improvement from the 5.4 percent decline recorded in April but the drop compared with a 1.8 percent rise forecast in a Kyodo news agency market survey.
The data were the lowest value since the government began compiling the detail in April 1987.
Machinery orders fell sharply among mining companies and makers of steel products, paper and precision instruments. Orders increased among carmakers and their suppliers.
Exports dipped 42.2 percent from a year earlier, a steeper decline than the previous month and the current account surplus fell to ¥1.3 trillion yen ($13.8 billion). Imports declined 43.9 percent, the ministry said.
Japan, the world’s second-largest economy, is forecast to have grown in the second quarter by an annual 2.3 percent rate after a record 14.2 percent shrinkage in the first quarter, according to economists.
Last week, the Bank of Japan’s quarterly Tankan survey, showed large firms expect earnings to fall 20 percent this fiscal year and plan to cut spending by a wider margin than they forecast three months ago.
Overseas shipments of cars and iron and steel products were the most severely impacted, dropping by 61 percent and 50 percent respectively.
Japan's exports to North America and the European Union tumbled about 45 percent. Asia-bound shipments were down 36 percent.
