Japan's June core machinery orders, an indicator of future capital spending, declined to -2.7% which was higher than estimates of -7.0% but lower than prior months reading of +10.5%. Though it was the first decline in 2 months, officials are confident that the pace of activity is picking up.
The BOJ released the minutes from their July 11 meeting with most of the members expecting inflation to reach the +2.0% target by the end of 2014 but were wary of a near term pause. Some of the members also stressed the need for the government to proceed with fiscal consolidation though one member expressed concern that the "overly heightened expectations" that the BOJ would keep rates at low levels might make this a difficult proposition. There was also broad based support for the easing measures implemented so far as they appear to be working to prop up both businesses and households alike. Overall, there was consensus that the Japanese economy would stage a moderate recovery.