05/14/18: The Japan Machine Tool Builders’ Association reported today that orders for machine tools from the country’s manufacturing companies rose at a slower rate for the third consecutive month during April, increasing by 22%, as compared to the same month a year ago, following a 28.1% and 39.5% year-over-year increase during the two prior months, respectively. That’s the slowest rate in increase in the country’s orders for machine tools since February 2017.

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The recent slowing in Japanese manufacturers’ orders for machine tools suggest that manufacturing activity in Japan is in the process of peaking, if it hasn’t already peaked. Such a development would bode poorly for the near-term future direction of Japan’s economy, as well as Japanese stock prices, as the country’s economy and publicly-traded stocks have historically moved in the same direction as economic activity in the country’s manufacturing sector.