November 2, 2017 / 5:54 AM / a year ago

PREVIEW-Japan Sept machinery orders seen falling but expected to rebound

* Sept core machinery orders seen -1.8 pct m/m vs Aug +3.4 pct

* Data due at 2350 GMT Wednesday

TOKYO, Nov 2 (Reuters) - Japan’s core machinery orders likely fell for the first time in three months in September, but analysts expect them to rebound soon as upbeat earnings encourage companies to ramp up capital investment, a Reuters poll showed on Friday.

Core machinery orders were expected to fall 1.8 percent in September from the previous month, after growing 3.4 percent in August, a Reuters poll of 14 economists showed.

While it is regarded as a leading indicator of capital spending, the data series is often highly volatile.

In July, orders jumped 8.0 percent, the strongest increase since January 2016.

On a year-on-year basis, core orders, which exclude those of ships and electric power utilities, were forecast to rise 1.9 percent in September, cooling from growth of 4.4 percent in August.

“Corporations’ willingness for business investment is picking up, supported by robust business results,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

Analysts say core machinery orders for July-September likely rebounded after two straight quarterly falls.

“Considering upbeat business sentiment, we expect firms’ capital investment will stay firm in the second half of this fiscal year,” said Yuichiro Nagai, economist at Barclays Securities Japan.

The Cabinet Office will announce the machinery orders at 8:50 a.m. Japan time on Thursday (2350 GMT Wednesday).

Prime Minister Shinzo Abe plans to offer tax breaks to companies to encourage them to raise wages and capital expenditures to ensure the economy continues to recover.

Japan’s current account balance, which is due at the same time as machinery orders, is expected to show 2.375 trillion yen ($20.85 billion) of surplus for September, the poll found.

A weak yen inflated income from overseas investment and exports’ growth boosted trade surplus for the month. ($1 = 113.8900 yen) (Reporting by Kaori Kaneko; Editing by Kim Coghill)

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