Japan core machinery orders fall due to power shortages

Workers in a factory
Image caption Leading Japanese manufacturers have seen their production hit hard by the quake and tsunami

Japan's recovery from the earthquake and tsunami continues to be hampered by the disruption to power supplies.

Core machinery orders in Japan fell by 3.3% in April, compared with the previous month, the latest data from the cabinet office shows.

Analysts said the data showed that the recovery in Japan remains volatile in the wake of power shortages.

Machinery orders are a key indicator of companies' capital spending and expansion plans.

"We have power shortage issues which are going to stay for a long time," said Yuuki Sakurai of Fukoku Capital Management

Mr Sakurai said that even if companies were to buy new machinery, they would not be able to utilise it fully because of power supply problems - so they may use their capital in other areas.

He added that as the summer season reaches its peak, things are likely to get worse.

"If they are trying to save power, we may even grow as a lower-than-expected rate," he said.

"This is not a steady recovery," he added.

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