This is what sluggish machine orders mean for Japan

It dropped by a shocking 9.7%.

According to BBVA, machine orders fell in January by more than expected (-9.7% y/y; consensus: -3.4%), pointing to weak corporate investment. 

Although growth momentum turned positive in Q4 2012, weak business investment is a headwind to the new government’s efforts to stimulate growth in 2013.

"Meanwhile, in testimony today before Parliament, BoJ nominee Haruhiko Kuroda reiterated he will pursue bold monetary easing to achieve the 2% inflation target," BBVA said.