Japan's machinery orders slide

Orders for Japanese machinery fell for a third month in December and bankruptcies increased as businesses scrapped investment plans amid a collapse in exports and deteriorating earnings.

Bookings slid 1.7 percent from November, when they fell 16.2 percent, the sharpest drop since 1987, the Cabinet Office said yesterday in Tokyo. Corporate bankruptcies rose 15.8 percent to 1,360 cases in January, the eighth monthly increase, Tokyo Shoko Research Ltd said in a separate report.

A wave of firings and canceled spending plans by Japanese manufacturers has heightened the risk of a prolonged recession, as fallout from the global slowdown ripples through the domestic economy. Nissan Motor Co, Japan's third-largest automaker, said yesterday that it will cut 20,000 jobs after predicting a loss this fiscal year as the global recession cripples car sales. "Falling exports are forcing companies to cut jobs and earnings forecasts, so it's not really the time to increase capital spending," said Hirokata Kusaba, a senior economist at Mizuho Research Institute in Tokyo. "We'll see a further slowdown in orders, which will be a big drag for the economy."